Hume v. Ware , 87 Tex. 380 ( 1894 )

The land in controversy was located by virtue of certificate number 30/191, class scrip, issued to the Buffalo Bayou, Brazos Colorado Railroad Company. When it was located does not appear. The patent issued May 22, 1876. J.M. Douglass transferred the certificate to John R. West, August 16, 1877. The statement accompanying the certified questions does not show how Douglass claimed the land or certificate.

"Question 1. Does the instrument above set out (the transfer from Douglass to West of the certificate not necessary to copy) convey title to the grantee therein named to the land in controversy, which had been previously patented by virtue of certificate number 30/191 therein conveyed; and if so, was the title so conveyed to said grantee a legal or equitable title?

"Question 2. If it is held that the instrument does not in and of itself convey the land previously located by virtue of said certificate, will it be permissible to show by other testimony that the parties thereto intended said instrument to convey the land; or on the other hand, that it was intended to convey only the certificate?"

The transfer of the certificate conveyed to the grantee an equitable title to the land located by virtue thereof if the grantor had title to the land. Lewis v. Johnson, 68 Tex. 448; Simpson v. Chapman, 45 Tex. 566; Hearne v. Gilleft, 62 Tex. 25 [62 Tex. 25]; Thompson v. Langdon, decided at present term of this court (ante, p. 254). It is true that all of the cases cited were instances of transfer of the certificate after location but before patent; but we can see no difference in principle between those and the present case. When the certificate was located it became merged in the land, and it was no more a part of the land after than before patent. It is not intended to overrule East v. Dugan, 79 Tex. 329, which is distinguishable from this case in the fact that in that case the certificate was sold by the order of the Probate Court, after the patent issued to the land. The law requires that the order of the Probate Court shall describe the land which is ordered to be sold, and it must be advertised twenty days, and sold on the first Tuesday in the month at the court house door. Some of the proceedings for the sale of real and personal property are so radically different that it would be impossible to hold consistently that a sale of that which is regarded as personal property under probate proceedings would convey real estate. It is unnecessary to discuss the distinguishing features further at this time.

We gather from the statement made in connection with the questions that the intervenors acquired an equitable title to the land before the transfer of the certificate to Douglas, who transferred to West. West bought for valuable though inadequate consideration, but without notice of the prior equitable title, except in so far as the inadequacy of price might put him upon notice. Intervenors sought to recover by returning to West his purchase money and value of improvements; at least expressed a willingness to pay what the court might adjudge. The following questions are certified upon this branch of the case:

"1. When it is shown that a defendant claiming to hold land as an innocent purchaser without notice has paid a great deal less for the land than it was worth at the time he bought it, and plaintiff offers to refund the purchase money, and the defendant has made no improvements on the land, is he entitled to hold the land and defeat the plaintiff's right to recover?

"2. If the foregoing question be answered in the negative, then would the fact that the defendant has in good faith made valuable improvements upon the land defeat the plaintiff's right to recover?"

A subsequent purchaser, in order to be entitled to protection, must not only pay a valuable consideration without notice, but he must be a purchaser in good faith. The consideration need not be what is an adequate consideration or the full value of the property. Inadequacy of price may be shown upon the issue of good faith. Wilson v. Denton, 82 Tex. 531 [82 Tex. 531]. That is, if the price paid was so grossly inadequate that it would call attention to the fact that there must be some defect in the title, or that the conveyance was made for improper purposes, as to defraud creditors, this might be submitted as a question of fact to the jury upon the question of notice; that is, knowledge of such fact as would put a prudent man upon inquiry. If there should be held to be notice, actual or constructive, then the purchaser would get no title, but it would remain with the holder of the older title. If, however, the facts are such that the title passes, then it can not be divested by payment of the price paid. Neither would the fact that a purchaser with notice has made valuable improvements defeat the former title, although the notice might not be actual, but constructive.

A subsequent purchaser might be so charged with constructive notice as to defeat his title and yet act in good faith, and be entitled to recover for his improvements.

Delivered December 10, 1894.