Gaston & Thomas v. Dashiell , 1881 Tex. LEXIS 147 ( 1881 )

Gould, Chief Justice.

Gaston & Thomas brought their action of trespass to try title against W. B. Dashiell, deraigning their title through a sale, made by virtue of a mortgage with power of sale, executed to them by Dashiell April 17, 1876, to secure the sum of $3,500, that day borrowed by him of Gaston & Thomas.

The land sued for had been the separate property of Mrs. 0. A. Dashiell, who, by her will duly probated and recorded in Kaufman county in 1867, devised all her estate to her children, making her husband W. B. Dashiell executor, with full power to manage, sell and dispose of the estate for the benefit of the children.

On the 10th day of April, 1876, the said executor, by a deed reciting a consideration of $20,000, and purporting to be made by virtue of and for the purposes mentioned in the will, conveyed the land in controversy to J. A. Bennett; the deed was, on the same day, acknowledged in Dallas, and was recorded in Kaufman county on April 12, 1876.

On the 12th day of April, 1876, J. A. Bennett, by a deed reciting a cash consideration of $20,000, conveyed the land in controversy to W. B. Dashiell, warranting only against those claiming under him. Said deed was, on the day of its date, proven for record and recorded in Kaufman county.

These facts were set up in a plea of intervention filed by Nestor Morrow, as special guardian for the surviving children of C. A. Dashiell, alleging also, and on the trial it was so proven, that the conveyances from Dashiell to Bennett, and from Bennett to Dashiell, were without consideration, and made for the purpose of enabling Dashiell to incumber the land for his individual use. The plea charged Gaston & Thomas with notice, actual and constructive, that the mortgage was in fraud of their rights.

Gaston & Thomas testified that in April, 1876, Dashiell applied to them at Dallas, where they carried on business, to borrow money, and that they agreed to lend him $3,500 upon his giving “realty as security” and furnishing the proper evidences of title; that a few days afterwards, on April 17th, Dashiell delivered them the mortgage, with the certificate of the county clerk of Kaufman county that the records showed perfect title free of incumbrance in Dashiell, and a certificate of a law firm in Kaufman to the same effect, and that the title was, so far as they knew otherwise, free from incumbrance of any character whatever. Gaston & Thomas testify that they relied solely on these certificates, and had no knowledge of any defect of title, or of what the chain of title was.

It is- unnecessary to detail the evidence further, or to give more than a part of the charge. The jury were instructed that whilst the executor had no authority to sell except for the benefit of the children, one who purchased from him in good faith without notice of his fraud, or one who in like manner purchased from Bennett whilst the title was in him, would take a title superior to that of the intervenors. The .charge proceeds: “The executor could not become the purchaser of the land through Dr. Bennett or any one else; and if he did so, he would hold it in trust as the executor of his wife’s will, and could sell it alone for the benefit of the children. This is a rule of law of which the plaintiffs and every one else are bound to take notice at their peril; and if the jury believe from the evidence that Dr. Dashiell, as the executor of his wife’s will, with the intent to convert the property to his own use, conveyed the land in controversy to Dr. Bennett without a valuable consideration, and made him a deed as such executor, and that immediately thereafter Dr. Bennett reconveyed the same land to the executor in his own name, then Mr. Dashiell would not thereby become the owner of the land, and he would not have power to sell it any more than he would before the execution of such conveyances; and if the jury believe from the evidence that the will of Mrs. Dashiell was properly probated and recorded in Kaufman county, and that the land in controversy is part of the estate, and that the executor, in his capacity as such executor, conveys the land to Dr. Bennett, and immediately thereafter Dr. Bennett reconveyed the same land to Dr. Dashiell in his own name, and that these deeds were both duly recorded in Kaufman county at the time the plaintiffs took their deed of trust, then they would be in law and in equity charged with constructive notice that the executor had violated his trust and that he still held the land as such executor, for the uses and purposes mentioned in the will; and however innocent in fact they may have been, they- would not in law be innocent purchasers. The records would be of themselves notice to the plaintiffs that they were taking a deed of trust upon property which rightfully belonged to the legatees in the will, and in that event the jury should find for the intervenors. ”

The verdict and judgment was in favor of the intervenors, and the first question presented is the correctness of this charge.

It is to be noted that Gaston & Thomas deraign their title through the will of Mrs. Dashiell, the deed of the executor to Bennett, and the quit-claim deed of Bennett back to Dashiell, and that they are conclusively presumed to have inspected these instruments. Although they may in fact have had no knowledge of the contents of the will and deeds, they are charged with notice just as if they had actually inspected them. Willis v. Gay, 48 Tex., 470; Robertson v. Guerin, 50 Tex., 323; Peters v. Clemens, 46 Tex., 123; Cordova v. Hood, 17 Wall., 1; Thornton v. Knox, 6 B. Mon., 76; Woodward v. Woodward, 7 B. Mon., 116; 1 Sugden on Vendors, par. 30, and p. 774, par. 45; White & Tudor’s Lead. Cas. in Eq., 4th Am. ed., vol. 2, pt. 1 [53-4], 123-4; Wade on Notice, secs. 308-10.

As the plaintiffs are thus chargeable with knowledge of the contents of these instruments, it is not important to inquire as to the extent of the notice growing out of registration.

It is further to be noted that the charge is to be tested, not as an abstract proposition, but with reference to the facts in evidence. An examination of the authorities fails to satisfy us that there is a rule of law making a reconveyance by a purchaser shortly after, or on the same day of the sale and conveyance by the trustee to him, on its face evidence, as against one who subsequently buys, of an indirect purchase by the trustee of himself. Appellee cites from 1 Leading Cases in Equity (part 1, p. 255), where, in discussing the disability of a trustee or executor to buy of himself, and stating that the attempt to do this through another is an indirection indicating collusion, the authors say: “Accordingly, where a purchaser at such a sale reconveys the property at once, or within a brief period, to the executor or trustee, the presumption is that he is used as a tool or cover, and the transaction will be set aside as a constructive, if not actual fraud, citing Obert v. Obert, 2 Stockton Ch., 98; 1 Beasley, 423; Rosenberg’s Appeal, 2 Casey, 67. And as the defect is apparent on the face of the record, a third person buying subsequently will be affected with notice and cannot hold the land. Rosenberg’s Appeal.”

We have examined the cases cited, and the case of Ward v. Smith, 3 Sandford. Obert v. Obert (1 Stock. Ch. and 1 Beasley) was a suit by an heir against the administrator to set aside a sale, where the purchaser had reconveyed to the administrator on the same day. The purchaser was a man of no means and had paid nothing. The price was grossly inadequate, and there was other evidence that the administrator was the real purchaser. The chancellor, passing on the facts as well as the law", set the sale aside. Bosenberg’s Appeal was a case where, on settlement of their accounts, the executors were charged to have been jointly interested with a purchaser at a sale made by them, and the land having been resold at an advance, the executors were required to account for the profits. There was evidence tending to establish an arrangement for the joint purchase prior to the sale, and it was shown “the partnership between the purchaser and the executor existed immediately after the property was stricken down to him, before conveyance or payment of any of the purchase money, and whilst their relation to the property as trustees still continued.” For aught that the report of the case shows to the contrary, the purchaser received and held the title in his own name, and it does not appear that he was a party to the contest.

Ward v. Smith was a case where one of two administrators became the purchaser at an administrator’s sale, uniting with fiis co-administrator in making a deed to himself, and afterwards selling and conveying to a third party. Of course that third party took subject to the trust.

These cases do not establish it as a rule of law that a reconveyance to a trustee at, or shortly after the sale by him as trustee, is on its face fraudulent, so that, if the transaction be in fact fraudulent, a purchaser from him would be conclusively presumed to have notice of the fraud.

On the other hand, the cases cited against the proposition are also unsatisfactory, and are none of them as strong as the case before us. Bobbins v. Bates, 4 Cush., 104; Blood v. Hayman, 13 Metc., 231, and Jackson v. Walsh, 14 Johns., 414, are all cases where the original deed by the trustee was executed to consummate a sale made long previously. Perhaps the strongest case on that side is Lazarus v. Bryson, 3 Binney, 54. There was a sheriff’s sale and deed in May, and in March of the ensuing year the purchaser conveyed back to the sheriff for the same price. In September following the sheriff conveyed for a much larger consideration. It was held that the circumstance of the reconveyance was not constructive notice. Chief Justice Tilghman says: “It is a circumstance, however, which the jury might take into consideration on a question whether the defendant had actual notice.”

But, as has already been said, the correctness of the charge does not depend on the existence of such a rule of law, but is to be tested by a reference to all the facts in evidence. This is not a mere reconveyance to the trustee, but is a reconveyance by way of a quit-claim, the very large consideration of $20,000 being the same in both conveyances. A pregnant circumstance is that both conveyances are made after negotiations for the loan had commenced, and after Gaston & Thomas had stated that they would lend on real estate security. With these additional circumstances, the latter testified to by the appellants themselves, and it being clearly shown that the conveyance to Bennett was without consideration, and his reconveyance made probably on the same day that Dashiell’s deed reached him, we think that as matter of law Gas-ton & Thomas were chargeable with notice of the fraud. Notice is often a question of law, and where the evidence tending to charge parties with notice consists in part of written instruments, and in part of admitted or maquestioned facts connected with those instruments, we think that the question should be one of law. Especially should this be so in this case, where Gaston & Thomas deny any actual knowledge of the conveyances, but by an inflexible rule of law are to be charged with notice, just as if deeds had been presented to them by Dashiell.

But if this conclusion that the charge was under the facts of the case a proper charge, and was not objectionable as being on the weight of evidence, be questionable,, we are satisfied that under the evidence the jury could not have found any other verdict than the one rendered; or rather that a different verdict would have been so clearly wrong that we would have felt it our duty, for that reason alone, to reverse a judgment based upon it. It is manifest, then, that even if the charge were erroneous, it has not operated to appellants’ injury, and that it therefore constitutes no sufficient ground for reversing the judgment. G. H. & g. A. R’y Go. v. Dilahunty, 53 Tex., 212. The judgment is accordingly affirmed.

Affirmed.

[Opinion delivered December 20, 1881.]