Carey v. Starr

James F. Starr and his wife, Clara C. Starr, owned as their separate property and in separate parcels the Andres Gonzales league of land situated in Wood County, which they caused to be divided into blocks of about sixty acres each. During the latter part of the year 1896 and the first of 1897, they sold twenty of the blocks to twenty different persons. Each purchaser paid one-fourth of the price cash and gave notes for the remainder, due at future dates. Starr and wife made a separate deed to each of the vendees, and in each of the deeds and in the notes given by each vendee for the purchase money, a vendor's lien was expressly reserved, and, in addition, there was inserted in each deed and each note the following stipulation: "That I do agree that until said consideration for said conveyed land is fully paid, I will duly render said land for taxation, except for the present year, and pay the taxes thereon promptly as they become due, and will not remove, nor permit others to do so, any timber, stone, or other material of value now upon said conveyed land, and will not use said material except as may be necessary in improving said land, and for necessary fuel to be used on said conveyed land by the person occupying said conveyed land under said deed." Soon after the sales were made, each of the vendees began to cut the timber and make it into railroad ties and each of them sold, directly or indirectly, the ties to J.W. Carey, who was a tie contractor for the railroad company and sold the ties to the Missouri, Kansas Texas Railway Company of Texas. In August, 1897, Starr and wife learned that the vendees had cut the timber and sold it, and, by agreement between them and their several vendees, each one of the sales was rescinded and each of the twenty blocks was reconveyed to Starr and wife, according as it had been conveyed by him or her. In consideration of the conveyance, all of the purchase money notes were canceled; but it was expressly stipulated that Starr and wife reserved the right to sue for the value of the timber and of the ties which had been cut from the land and sold.

J.F. Starr and Clara C. Starr filed suit in the District Court of Wood County against J.W. Carey and the Missouri, Kansas Texas Railway Company of Texas for the value of the ties purchased by Carey from their several vendees that had been taken from the lands in question. The case was tried before a jury which returned a special verdict, finding the following facts:

"1. The timber was worth 5 cents per tie standing in the woods.

"2. First-class ties worth 31 cents per tie on the railroad where delivered, and culls worth 13 cents. Ten per cent were culls.

"3. A.S. Cain, Starr's agent, did not consent for the ties to be cut.

"4. He had no authority to consent to the timber being cut.

"5. The purchasers knew that Starr and wife would object to the timber being cut.

"6. A.S. Cain was plaintiffs' agent to sell the land.

"7. Cain was the agent to prevent timber being cut from said land.

"8. Cain was the agent to see that the timber clause in the deeds was not violated.

"9. Starr and wife did not know that the timber was being cut.

"10. Cain knew that the timber was being cut.

"11. The facts show that the purchasers cut timber in violation of the contract.

"12. Carey purchased some of the ties from persons who made the ties, and partly from other persons.

"13. Defendants purchased the ties without any notice of the timber clause and paid fair value therefor.

"14. Land was worth $3.50 in May, 1897, and worth $2.25 per acre when the suit was filed in October, 1897.

"15. The plaintiff could have learned that ties were being cut by the use of ordinary diligence.

"16. The purchaser of the land paid to Starr and wife cash $1097.99; the value of the ties standing in the woods was less than this amount.

"17. The purchasers of the land did not buy with any intention of paying for it.

"18. The purchasers intended when they purchased the land to cut the timber in violation of the contract."

Both parties moved the trial court to enter judgment in their favor upon the findings of the jury, but the court rendered judgment for Mrs. Starr for $289.84 and for Starr for $144.42. The Court of Civil Appeals reversed that judgment and gave judgment in favor of Starr and wife against J.W. Carey and the Missouri, Kansas Texas Railway Company of Texas for the value of the ties at the time and place they were sold to Carey, less the cash payments made by the vendees of the several tracts of land.

The first question that arises upon this state of facts is, what relation did Starr and wife sustain to the land between the date of the sales made by them and the reconveyance of the land? The plaintiffs in error claim that Starr and wife occupied the relation to the land of mortgagees out of possession and were entitled to damages according to the rules of law applicable to mortagees, while the defendants in error claim that they were the owners of the land and the timber at the time it was cut and sold, and are entitled to recover its value in the condition it was when Carey bought it.

In the case of Stephens v. Motl, 82 Tex. 81, this court held that a vendor who reserved a vendor's lien in his deed could not maintain suit for the land against one claiming adversely to the vendee. The court said: "Notwithstanding the reservation of the vendor's lien in the deed, Motl had the right to the possession of the land under his contract of purchase, and title was vested in him, subject only to be defeated by rescission for failure to pay the purchase money; and it might become perfect on payment of the notes. He was then the proper party to bring suit for the land. Rucker did not have the right of possession. In an action of trespass to try title, the petition must state that the plaintiff was in possession of the land when the right of action accrued or when ousted, or that he was entitled to such possession. Rev. Stats., art. 4786. Although he held the superior title as between himself and his vendee, Rucker stood in the relation of a mortgagee of the land out of possession, and not entitled to possession until default on part of the vendee and a rescission by him of the contract, or a foreclosure." The title that remains in the vendor in such transaction is superior in the sense that the vendee can not assert his title against the vendor, unless he has paid the purchase money.

From the time it was first announced that the reservation of lien in a deed reserved the superior title to the vendor, there has been a continuous and persistent effort to push it to the limit of executory contracts for the sale of land, but this court has steadily resisted that effort and has uniformly limited the vendor's title to the character of security for the purchase money debt, and, when the debt has been paid, the title of the vendor ceases. Ogburn v. Whitlow, 80 Tex. 241; Brown v. Montgomery, 89 Tex. 250. In Ogburn v. Whitlow, the vendee sought to defend against the purchase money notes on the ground that there was a defect in the title to the land and claimed that the deed was an executory contract; but this court said: "While such deeds have been held by this court to be executory for some purposes, we think it should not be so held for all purposes, and that the one now in question should, upon the issue now presented, be treated as an executed contract."

When the purchase money has been paid, the title of the vendee in a deed of the character in question becomes absolute as to the vendor without any action on his part. It is not executory in any sense, except that the title awaits the payment of the purchase money for the land. Stitzle v. Evans, 74 Tex. 596; Russell Seisfeld v. Kirkbride, 62 Tex. 455.

Starr and wife had the right to have the purchase money paid out of the land, and, for that purpose, had a lien upon it and upon the timber growing thereon. To secure the payment of the debts, they could have maintained an action against their vendees, if they unlawfully cut and carried away the timber therefrom, in case the land failed to pay the debts; or they might have enjoined the cutting of the timber by their vendees by showing to the court that it impaired their security. The debts not being paid, Starr and wife might have maintained an action against any one who trespassed upon the land and appropriated the timber; but would have been required to credit the amount of recovery upon the debt. In this respect their rights were the same as mortgagees, and their recovery should be governed by the same rules. The injury to their security is the measure of recovery. Bank v. Knapp, 22 La. Ann., 117; Jackson v. Turrell,39 N.J.L. 329; Schalk v. Kingsley, 42 Id., 32; Dudley v. Reynolds,1 Kan. 285; Lane v. Hitchcock, 14 Johns., 214.

The amount of the debts secured by the vendor's lien constituting the measure of the vendor's rights in the land, when the debts were satisfied by a reconveyance of the property to Starr and wife, their right of action for the removal of timber terminated. Berthold v. Holman, 12 Minn. 335; Corbin v. Reed,43 Iowa 459; Kennerly v. Burgess, 38 Mo., 440; Hutchins v. King, 1 Wall., 53. The case last cited is in point. The mortgagor made default in payment. He had cut timber from the land and sold it and the mortgagee seized the timber in the hands of the purchaser. The debt was subsequently paid and the person who purchased from the mortgagor demanded the timber of the mortgagee, who refused to deliver it, claiming, as in this case, that he was owner of the land and the timber; but the Supreme Court of the United States held that the mortgagee's rights in the timber ceased when his debt was paid. The court said: "The mortgagors had, it is true, no right to cut the timber after default made in any of the payments designated in the mortgage. They could do nothing to diminish the value of the estate. The right to cut the timber rested upon the license contained in the stipulations of the mortgage. Their cutting, except in pursuance of such license, might have been restrained, upon proper application, by a court of equity. Brady v. Waldron, 2 Johns. Ch., 148. The sale by them, after it was cut, did not divest the lien of the assignees of the mortgage; the purchasers took the timber subject to their paramount rights. The assignees could follow it and take possession of it, and hold it until the designated amounts due at the time were paid. When these were paid, their rights over it ceased, and the vendee of the mortgagors became invested with a complete title. The subsequent detention of the timber by the assignees was wrongful and the sale of it a conversion, for which they were liable to the purchaser."

The cases of Berthold v. Holman, 12 Minnesota, 335, and Corbin v. Reed, 43 Iowa 459, cited above, are directly in point, each holding that a purchase of the land by the mortgagee in satisfaction of the debt extinguished his claim for timber cut before foreclosure. The defendants in error could not have acquired from their vendees any right to sue the plaintiffs in error, and their reservation could apply only to the right they had before, if any, against Carey and the railroad company, which was satisfied by their acquisition of the land.

The District Court and the Court of Civil Appeals erred in awarding any sum in favor of Starr and wife against the plaintiffs in error, and it is ordered that the judgment of the Court of Civil Appeals be reversed, except so far as it reverses the judgment of the District Court, and, to that extent, it be affirmed; and this court proceeding to render such judgment as the District Court should have rendered, it is ordered that James F. Starr and Clara C. Starr take nothing by their suit, and that the defendants, J.W. Carey and the Missouri, Kansas Texas Railway Company of Texas, go hence without day and recover of the said J.F. and C.C. Starr all costs in this behalf expended.

Reversed and rendered.