Permian Oil Co. v. Smith ( 1937 )

ELWOOD.FOUTS, Special Justice.

This case was decided by the opinion appearing in (Tex.Sup.) 73 S.W.(2d) 490. Motions for rehearing were duly filed. Before action was taken on these motions the personnel of the court was .changed, Associate Justice SHARP succeeding Judge GREENWOOD, and Associate Justice CRITZ replacing Judge PIERSON, deceased. Judge CRITZ certified his disqualification, resulting in the appointment of ELWOOD FOUTS, of Houston, Tex., as Special Associate Justice, who duly qualified. The court as thus composed requested oral argument on the motions due to the fact that Chief Justice CURETON alone heard argument as a member of the court when the case was originally disposed of. The questions decided by this opinion on the motions for rehearing embrace only a portion of those discussed and disposed of by the former opinion which is overruled where .it does not conform to the law as here announced and as thus modified stands approved.

The parties will be designated here as they were in the trial court. Briefly summarized the facts are:

This suit was filed June 21, 1928, by Permian Oil Company against the defendants, seeking to recover the land described and the value of the oil produced therefrom. Plaintiff established title in John Monroe and then offered in evidence the pleadings and judgment rendered in cause No. 854, John Monroe v. T. F. Hickox, in the district court of Pecos county, Tex. That suit was filed August 22, 1910, and disposed of March 4, 1911, by a take nothing judgment entered against the plaintiff. The petition there was in statutory form of trespass to try title describing sections 103 and 104, Texas Central Railway, as the land sued for. The answer was a plea of not guilty. The present suit involves said section 103. Apparently some of the defendants claim title under John Monroe. There was filed in the former case the court’s findings of fact and conclusions of law. Plaintiff, which holds under Hickox, asserts that it has Monroe’s title by virtue of the former judgment. It is evident from the record that some of the defendants herein claim to have acquired their several titles at a time when that judgment was not properly recorded, as required by statute. Plaintiff made no proof that such defendants were not bona fide purchasers for value or that they bought with notice. The judgment in Monroe v. Hickox and its supporting pleadings was admitted in evidence over the objection of defendants on the ground that such proof was not made and on the further ground that the judgment was either void on the face of the record or else if properly construed did not dispose of the issue of title. Defendants renewed their objections in ⅛ motion to strike the evidence, in which they prevailed after they themselves offered in evidence, over the objection of the plaintiff, the entire record out of which emanated the judgment of Monroe v. Hickox. Their motion resulted in a peremptory instruction against the plaintiff.

Objection was made by the plaintiff that the court’s findings of fact and conclusions of law in Monroe v. Hickox were not a part of the judgment record. We do not agree with this contention.

The phrases “judgment roll,” “judgment record,” and “face of the record” are terms used interchangeably in our decisions. They grow out of the common law where in the earliest cases on officer of courts of record preserved on a scroll of parchment a record of the issues which the contestants agreed to litigate. At that time their pleadings were oral. This roll later embraced tlie written pleadings, the court’s charge to the jury, the jury’s verdict, the court’s final judgment, and other similar matters constituting a part of the proceedings of the trial. One of the purposes of the roll was to enable the proper application of the rule of res adjudicata, the record being preserved among other reasons in order to show what issues had been dis: posed of and the parties to be bound thereby. When inquiry as to what constitutes this record arises, it must be remembered that ordinarily one of the purposes of the inquiry is to properly apply the rule of res adjudicata. Every part of the trial proceedings preserved in courts of record under direction of the court for the purpose of its record constitutes the judgment roll.

The defendants offered the record of the former case for the purpose of establishing either that the judgment entered was void on the face of the record, or if not void, then construed in the light of the judgment roll actually disposed of only one issue, that of boundary, and therefore, they contend, did not operate as a muniment of title; or that it constituted conclusive evidence that the sole issue determined was that sections 103 and 104, as between the parties and their privies, either could not be located on the ground or else were in total conflict with senior surveys 34 and 35, G. C. & S. F. Ry. Co. block 194, and because of which they contend that plaintiff, the successor in title of Hickox, is estopped to now maintain that section 103 can be located on the ground free of conflict. These contentions are again strongly urged by the defendants in their motion for rehearing. Because of the doubts which were raised in the mind of the court by the argument that these contentions were supported by fundamental law which had been lost sight of in too narrowly adhering to precedent, we have re-examined the whole field of law involved.

The principle of res adjudicata is founded in public policy and is as old as English jurisprudence. Fundamentally its purpose is to expedite justice by putting an end to litigation; and to preserve the sanctity of the judgments of the courts by making them immune from collateral attack. Once a court has exercised its functions of decision on an issue over which it has jurisdiction, and that decision becomes final, the parties thereto and their privies cannot escape its binding effect. Lacking this anchorage of finality a ju-⅛ dicial system would be little more than a rule of fiat.

It has been said that the rule finds its application in two classes of judgments issuing out of courts having jurisdiction. One class is encountered where in the first case out of which the judgment issues, and in the second suit where the judgment is offered in bar, the parties are the same, the cause of action is the same, the capacity in which the parties act is the same, and the res or things disposed of are the same. Such a-judgment, if unambiguous, as a general rule is treated as an absolute bar to retrial of the same cause of action on the theory that it has been merged in the judgment. A judgment of this type usually permits of no inquiry into the balance of the record from which it emanates, except in the case of certain well recognized exceptions. Where such a judgment is ambiguous, the judgment roll, and if necessary extrinsic evidence, is admissible, not to contradict the judgment, but only to aid in its construction. The other type is encountered where the parties to a subsequent suit seek to reliti-gate an issue which was disposed of by final judgment in a former suit to which they were parties, although ■ the cause of action may have involved other issues. In the latter instance it has been said the parties and théir privies are estopped to try again such issue disposed of by the former judgment and the entire record in the first case is admissible in evidence in order to determine whether or not the issue involved in the second case was actually disposed of in the first, without reference to the question of ambiguity.

The cases as a matter of fact do not so completely separate themselves into two such sharply defined classifications, but graduate from the one into the other, and hence the explanation for the use by courts of much very general and conflicting language. It must be borne in mind that the purpose of the law remains constant to prevent the failure of justice as the result of permitting the retrial between the same parties or their privies of a cause of action or of an issue which has been finally disposed of.

The judgment in cause No. 854, unless affected by ambiguity leading to the construction sought by defendants, clearly comes within the first classification. It is necessary, therefore, to ascertain whether that judgment is ambiguous. This involves a number of problems. We find no reason to hold it ambiguous simply because it is necessary to refer to the pleadings.' It is true the description of the land and the nature of the cause of action do not appear in the face of the judgment. However, this is supplied by the direct reference to the plaintiff’s pleadings appearing in the face of the judgment. Judgments are construed like other written - instruments. “That is certain which may be made certain,” and being certain, is unambiguous, whether it be a judgment or a writing of other description. By this reference in the judgment there is as effectively supplied the description of the land and the cause of action disposed of as though the judgment had recited both in its face. Freeman on Judgments, § 97; Martin v. Teal (Tex.Civ.App.) 29 S.W. 691; Ruby v. Von Valkenberg, 72 Tex. 459, 10 S.W. 514. The petition and the decree are set forth at the end of this opinion in a addenda note.

But the defendants nevertheless contend that even after referring to the pleadings it is impossible to. know what the judgment decided, and thus being ambiguous it is proper to consult the judgment record from which it appears that the sole issue determined by the court was an issue of-boundary and that, being only a boundary suit, the judgment is void and falls because the description is insufficient, citing the requirements of article 7366, and the decisions of this court to the effect that judgments, in boundary suits ..involving descriptions similar to the one used here, are ineffectual because nothing has been decided. Inherent in these contentions is the con-fception that different causes of actions are involved in boundary suits and other trespass to try title suits.

We are mindful that in a number’ of early decisions by a divided court, judgments in boundary suits brought in form of trespass to try title were held to be final notwithstanding the statutory right then existing by which plaintiffs in trespass to try title were permitted to bring a second suit. But while these holdings appeared to be on the theory of res ad-judicata, they may be in part accounted for by recognizing that they also involved the construction of a statute, the court ascertaining from the record that “title” as that term was employed in the then existing statute was not an issue in those cases. There are also cases, construing the former statute making judgments in boundary cases final in Courts of Civil Appeals, from which it might be inferred that the cause of action in a' boundary case in the usual form of trespass to try title differs from that in other trespass to try title cases. Without reviewing these cases it may be said that they were undoubtedly influenced by the fact that they were construing the effect of the statute. We are unwilling to accept cases of either class as- authority for the proposition that different causes of action are involved in trespass to try title suits brought in statutory form one of which turns on the fact of boundary and the other of which turns on some other evi-dentiary fact affecting title.

Measured by the familiar rule, cause No. 854 as tried was a boundary suit. On appeal it would have been judged as such' because the record shows there would have been no suit but for the question of boundaries. Expressions from boundary cases on appeal indicating judgments to be void because the testimony shows a description, apparently sufficient, actually to be insufficient to locate the land on the ground, cannot be invoked on collateral attack to nullify a judgment in trespass to try title where the description on its face is sufficient. Such decisions are dealing with voidable, not void, judgments. But this is not an appeal of the case of Monroe v. Hickox, No. 854. The question here is one of res adjudicata: Does the judgment in cause No. 854 dispose of the title to the land .in question so that the parties and their privies are bound thereby ? Under decisions of this court founded on our present trespass to try title statutes, the contention now made constitutes a collateral attack on the judgment and under the general rule must be judged by the pleadings and judgment alone, unless the judgment because of ambiguity is limited by the judgment roll. Aside from the claim of ambiguity, the judgment in cause No. 854 as it stands is not void because of insufficient description: The description used in the petition in that case was sufficient under the requirements' of article 7366, as was pointed out in the original opinion. The fact that on the trial boundary was the sole controversy controlling title does not keep the former judgment, which disposed of title, from binding the parties and their privies. In trespass to try title determination of the outcome of the' suit through the fact of boundary does not alter the cause of action plead and disposed of by the judgment. In Monroe v. Hickox the cause of action was the title to the land described. These conclusions follow from recognized principles as is pointed out in the well-reasoned opinion in Freeman v. McAninch, 87 Tex. 132, 27 S.W. 97, 47 Am.St.Rep. 79, where it was decided that a judgment in a boundary suit brought in form of trespass to try title, although disposed of on the fact of boundary, nevertheless was res adjudicata of the issue of title. There the pleadings were in statutory form of trespass to try title. “An issue is the question in dispute between parties to an action, and, in the courts of this state, that is required to be presented by proper pleadings. * * * Thus were the issues presented, and the leading issue was one of title; and the fact that the determination of that may have depended on a question of boundary could not-change the character of the vital issue in the case, for that was but a question of fact, to be considered like any other fact in determining whether the issue of title to the land should be decided in favor of the one party or the other. * * * The issue presented by the pleadings and determined by the judgment, was one of title; and that * * * this depended on the fact of true locality of the boundary between the surveys, could not change the character of that issue.” Freeman v. McAninch, 87 Tex. 132, 27 S.W. 97, 98, 47 Am.St.Rep. 79. The judgment in Monroe v. Hickox is not void unless construction made necessary because of ambiguity discloses some fatal deficiency.

Returning to the question of ambiguity and the contention that the effect of the judgment in cause No. 854, because it is claimed to be ambiguous, should be limited to the issue or issues actually tried, as disclosed by the findings of fact and conclusions of law, and the further contention that plaintiff is estopped while claiming the benefits of that judgment to now show a total absence of conflict and a present ability to locate the land on the ground, it may be said that were these original questions their answer would be- more difficult. It is true, as pointed out by some of the defendants, that in every decision from French v. Olive, 67 Tex. 400, 3 S.W. 568, down to that announced in this case in the original opinion by the Commission of Appeals, title itself was actually the issue tried. It is true that nowhere has this court directly announced that in trespass to try title where the cause of action was properly limited to some issue less than title itself plaintiff nevertheless lost his title under a take nothing judgment and the defendant gained it. It is true that in many of the other states where statutes similar to our trespass to try title statutes prevail, and where the statutory provision similar to that embraced in article 7391 exists, the general rule seems to be that the defendant in a take nothing judgment does not gain or become vested by presumption with the plaintiff’s title. On the trial he must establish facts entitling him to acquire the plaintiff’s title by virtue of the judgment. Indeed, the United States Supreme Court in Barrows v. Kindred, 4 Wall. (71 U.S.) 399, 403, 18 L.Ed. 383, construing the Illinois Statute, which resembles our article 7391, after commenting on the absence of construction by the state courts, said: “Where a plaintiff shows no title, and is therefore defeated, it is not easy to perceive how any title can be said to have been established in the action, or how, under the statute, the result can affect his right to bring a new action for the same premises.”

By the rule thus announced a losing plaintiff in a take nothing judgment would not be foreclosed from bringing a second suit if title itself were not affirmatively established in defendant in the first suit. Under such reasoning every take nothing judgment in trespass to try title would be ambiguous because it would be impossible to know whether it operated as a dismissal or as an adjudication of title, or an adjudication of some right incident to title. Therefore the record could rightly be employed to construe and limit it to the actual issue tried, and if the effect of the take nothing judgment was equivalent to a dismissal, that effect' would permit the- bringing of another suit by the losing plaintiff.

But here 'we are confronted with article 7391 and its construction by this court. That article .reads: “Any final judgment rendered in any action for the recovery of real estate shall be conclusive as to the title or right of possession established in such action upon the party against whom it is recovered, and upon all persons claiming from, through or under such party, by title arising after the commencement of such action.”

When Judge Gaines in French v. Olive announced the rule that the effect of a take nothing judgment in trespass to try title was to hold that the defendant had the better title, his opinion, and the long line of decisions by this court following it, necessarily operated’ to construe article 7391 and the judgment together and in effect announced the rule to be: That when the plaintiff failed for any reason, whether it be due to conflict with a senior survey, outstanding title in a third party, or other lack of title in himself, the judgment left the defendant in possession of the premises; and that such possession imported title; and that title was thereby' established in the defendant.

The party in possession of land is considered to be the owner until the contrary is proved. His possession imports that he holds a title thereto. As was said in Linthicum v. March, 37 Tex. 349: “This has been the repeated language of this court since Hughes v. Lane, 6 Tex. [289] 292, in which it is said: ‘The possession of the defendant gave him a right against the plaintiff, until he showed sufficient title.’ ” Thus the contention that no title was established by the judgment in cause No. 854 seems unsound. In this state it is elementary that no judgment can “establish” “title or- right of possession” in a litigant in the absolute sense of finality against the world. The “title or right of possession established” is limited to the parties bound by the judgment.

In trespass to try title brought in statutory form the plaintiff asserts that he has the title and is entitled to the right of possession. The defendant by his plea of not guilty admits that he has possession and asserts that he .possesses the better title. When the ordinary judgment is entered there cannot remain outstanding in the losing party an opposing title. The decree announces that facts appeared on the trial which converged and combined in the winning party all of the rights of both plaintiff and defendant.

Had the pleadings in this case confined the parties to the issue of locating a boundary, we possibly might face a different case. The cause of action which was asserted against the defendant by the plaintiff in the trespass to try title suit of Monroe v. Hickox, pleaded in general form, was the claim to the title and possession of the land described. The defendant’s plea of not guilty admitted his possession and put in issue the plaintiff’s cause of action. The plaintiff failed and the defendant prevailed. In such an instance both the title and the possession of defendant was established as between the parties by the judgment. In this state a petition limited to the statutory form of trespass to try title always puts in issue both title and possession. Any one of a number of facts may determine the issue, but the cause of action reriiains the same. If the plaintiff seeks to limit the issue to one of such facts, he must do so by special pleading in appropriate form. By so doing he may limit the case to the portion of his land involved in the boundary dispute, or possession, or to some other incident of title.

It plainly appears therefore that under construction long established by this court the judgment in cause No. 854 was unambiguous. Furthermore there was present in the judgment and the judgment roll no other feature which took the judgment out of the general rule. The judgment could not be contradicted by the record, and being unambiguous neither was there anything in it to be interpreted or explained by the record. The judgment roll was properly admitted to test the validity of the judgment, but this only operated to show that the judgment was not void on the face of the record. Neither the rule of res adjudicata nor the rule of estoppel can be invoked to escape this conclusive effect. Instead these principles unite to establish this result. To hold otherwise would be to nullify the meaning of article 7391 as long construed by this court, and would overturn the long line of decisions to the effect that the plaintiff must recover on the strength of his own title and to the effect that possession imports title. Thus it has come about that the rule in this state is recognized to be that a judgment in trespass to try title that plaintiff take nothing by virtue of his suit operates as a muniment of title and adjudges in effect that facts were found to exist which between the parties established in the defendant all the title to the land, including, just as effectively as though-it had passed by voluntary conveyance, such title as plaintiff had.

Defendants also contend the trial court properly instructed the jury to find for the defendants at the close of plaintiff’s testimony because the judgment in cause No. 854 was not recorded as required by article 6638, Revised Civil Statutes. Defendants contend the burden was on plaintiff to prove notice or lack of consideration by defendants before the judgment was admissible. Plaintiff contends the burden was on defendants to prove themselves innocent purchasers without notice before they could receive the protection of that statute. We think that neither contention is correct.

Present article 6638, enacted .February 5, 1840, reads as follows: “Every partition of land made under an order or decree of a court, and every judgment or decree by which the title to land is recovered shall be duly recorded in the office of the county clerk in which such land may lie; and until so recorded, such partition, judgment or decree shall not be received in evidence in support of any right claimed by virtue thereof.”

The law of 1836 relative to registration of deeds which is quite similar provided: “No Deed shall take effect as regards the interest and rights of third parties until the same shall have been duly proved and presented to the court as required by this Act for the recording of land titles.” This act was amended February 5, 1840 (at the same time present article 6638 was enacted), so as to make unrecorded conveyances void as against all subsequent purchasers who established that they had bought for value and without notice. Under the law of 1836 the burden was on the senior unrecorded deed holder to establish that the junior deed holder was not an innocent purchaser for value. Under the act of 1840 this burden was shifted and the junior deed holder was required to show that he was an innocent purchaser.

The case of Kimball v. Houston Oil Company, 100 Tex. 336, 99 S.W. 852, 854, opinion by Judge Williams, construed the Act of 1836 affecting the registration of ■deeds. The question involved was that •of burden of proof, the holder of the junior deed contending that the burden was on the senior unrecorded deed holder to prove that the subsequent purchaser had knowledge of the prior deed. The court held this contention to be correct. Construing the language of the Act of 1836, in connection with the Act of 1840 which amended it, Judge Williams uses this language: “We think it is true that under either statute the burden is upon one claiming against an unrecorded deed to produce evidence sufficient to bring himself within its protection; to show, in other words, that he is one to whom its language applies.”

Continuing elsewhere, while recognizing that the Act of 1836 was a registration act and that the holder under the unrecorded senior deed could offer the deed in evidence in making out his prima facie case, he then says: “When, against such a deed” [referring to the unrecorded senior deed], “is produced a subsequent one from the same grantor, apparently valid, is it not shown, prima facie at least, that the claimant under it is a third party having a right or an interest to be affected by the prior conveyance, and is he not literally within the terms of the statute and entitled to its protection?” He answered by holding that the junior deed holder was then within the protection of that statute and that the burden shifted to the holder under the senior unrecorded deed to prove the junior deed holder was not an innocent purchaser.

The two statutes, the one applying to deeds, the other to judgments, are so similar in their wording as to make it appear that this reasoning applies with equal force in construing article 6638, unless it is inhibited by previous decisions of this court. The statute of 1836 concerning deeds provided that no unrecorded deed could affect the rights of third parties. The statute of 1840, present article 6638, concerning judgments, provides that no rights can be established under an unrecorded judgment. To undertake to establish a right under an unrecorded deed would be the only way a person could affect the rights of third parties and to undertake to establish a right under an unrecorded judgment of necessity would adversely affect the rights of third parties, so that the language of each statute operates to announce the same rule which applies in the one instance to unrecorded deeds and in the other to unrecorded judgments.

Here, as in Kimball v. Houston Oil Company, it is plausibly argued 'by plaintiff that article 6638 is only a registration statute designed to protect creditors and innocent purchasers and that properly interpreted the statute should be construed as our other registration statutes, to place the burden on the subsequent purchaser to establish that he bought for value without notice. It is true this court a number of times has held this to be a registration act and we later quote from some of those decisions. So had the Act of 1836 affecting deeds been held to be a registration act as was pointed out in Kimball v. Houston Oil Company, where Judge Williams quoted at length from Crosby v. Huston, 1 Tex. 203, 238, and then said (referring to Chief Justice Hemphill’s opinion in that case): “The court therefore concluded that proof of the unrecorded instrument, other than the record, might be made; but also held that the ‘letter of the statutes will be departed from only “where the notice is so clearly proved as to make it fraudulent in the purchaser to take a conveyance in prejudice to the known title of the other party.”’ * * * We regard this as a decision of the question in this case, declaring the law to be that the holder of a junior deed taken while the act of 1836 was in force is entitled to the protection of that act until his claim is shown to be fraudulent.” If the Legislature on February 5, 1840, -by the statute covering judgments, had intended to place the burden on the subsequent purchaser - to prove that he bought for a valuable consideration without notice, before he could receive the protection of article 6638, it could have done so by using the same language employed by it- on the same day when it amended the Act of 1836 affecting the registration of deeds, under which amended act this burden was placed on the junior deed holder. Evidently it intended to avoid this by using language similar to that of the original Act of 1836, affecting deeds.

Article 6638 has been construed several times by this court to be a registration statute and therefore not a rule of evidence precluding proof of an unrecorded judgment, just as the rule concerning the Act of 1836 covering unrecorded deeds was announced in Crosby v. Huston. The unrecorded deed under the Act of 1836 was admissible to enable the claimant thereunder to make out his prima facie case. But upon the introduction in evidence ■ by the subsequent purchaser of a conveyance taken while the senior deed was off the record the burden then fell on the unrecorded deed holder to show notice or lack of consideration on the part of the junior deed holder.

Such we believe is also the rule under article 6638.

Thornton v. Murray, 50 Tex. 161, seemed to go even further and hold as defendants contend. It is there stated: “The evident object of this provision, * * * is not to prohibit the introduction in evidence of a decree or judgment of the class designated, under all circumstances, until recorded, but only to apply the system of registration to such a judgment or décree, and to deny to a ⅞ party the right to so introduce it in evidence unless he shows its registration, or facts which make it, as between the parties and under the general provisions of the registration laws, admissible without registration.”

Also in Russell v. Farquhar, 55 Tex. 355, it is said: “ * * * the statute properly construed did not require the registration- of the former judgment to render it admissible in a subsequent suit for title and partition of the same land between the same parties.”

But in Henderson v. Lindley, 75 Tex. 185, 189, 12 S.W. 979, Judge Gaines demonstrated that the unrecorded judgment was admissible not alone against those who had notice but against all persons. However, he did not construe the statute so as to take away its protection. He only permitted the introduction in evidence of the judgment, which operated to make out a prima facie case. It was unnecessary for him. to comment on the burden of proof which fell on the plaintiff when the defendant introduced evidence to show that he purchased when the judgment was off the record; the trial court in that case appears to have placed the entire burden of proof on the claimant under the unrecorded judgment. The protection of the statute comes to life when the opposing party offers a title acquired while the judgment was off the record. By doing so that party brings himself within the protection of the statute, and the burden is then on the claimant under the unrecorded judgment to prove notice so clearly as to make it fraudulent in the subsequent purchaser to take a conveyance in opposition to the known title of the other party.

The judgment in cause No. 854, Monroe v. Hickox, was improperly stricken from evidence by the trial court. While the burden of proof rested on the plaintiff to show that the defendants had notice of the judgment or were not bona fide purchasers for value, upon the introduction of evidence by them showing that they purchased from or under John Monroe at a time when the judgment was off the record, this burden had not arisen when the motion to strike the evidence was sustained, and the peremptory instruction against the plaintiff was entered. The defendants had not offered their title.

Running through this lawsuit we find the appeal for relief from the mistakes of a party to another suit or the errors of another trial court. But such relief could come here, as is always the case, only at the expense of the rights of many Of those who have been “vigilant and careful.” The fact that the record in this case now shows that Monroe could have prevailed in his suit No. 854 if he had been sufficiently diligent does not weaken but only serves to emphasize the principles reaffirmed in this opinion. “When a party passes by his opportunity, the law will not aid him. In Ewing v. McNairy, 20 Ohio St. [315] 322, the judge says: ‘By refusing to relieve ' parties against the consequence of their own neglect, it seeks to make ■ them viligant and careful. On any other principle, there would be no end to an action, and there would be an end to all vigilance and care in its preparation and trial.’ ” Freeman v. McAninch, supra.