Liquid Carbonic Co. v. Logan

McCLENDON, Chief Justice.

This is the second appeal of this case [See former opinion Liquid Carbonic Co. v. Head (Tex. Civ. App.) 48 S.W.(2d) 464]. The instant contest is between appellant, holder of a purchase-money chattel mortgage on soda fountain fixtures, and Mrs. Head, holder of a landlord’s lien on the fixtures, which, however, was inferior to appellant’s. The latter recovered a personal judgment (without foreclosure) against Logan, the tenant, for the unpaid balance of its chattel mortgage debt. Mrs. Head was awarded title to the fixtures under a plea of limitation of two years. The case was tried upon an agreed ■■statement of facts; and the sole question presented is whether the limitation plea is supported by the record. The controlling facts follow:

Appellant’s mortgage provided for partial payments maturing July 5, 1929, and monthly thereafter. The suit was brought by Mrs. Head against the tenant and others, including appellant, to foreclose her landlord’s lien, and resulted in judgment by default against appellant on November 10, 1930. The property was sold under execution and bought in by Mrs. Head for $50 on December 19, 1930. On January 21, 1931, appellant sued out a writ of error, resulting in reversal of the trial court’s judgment. Liquid Carbonic Co. v. Head (Tex. Civ. App.) 48 S.W.(2d) 464. Mrs. Head applied to the Supreme Court for writ of error, which’was dismissed. On January 2, 1933, appellant filed an answer and cross-action upon its debt and lien. June 3, 1933, Mrs. Head filed an amended petition, in which for the first time she asserted title to the property by limitation; her prior pleadings -being predicated upon her landlord’s lien. This pleading is an alternative one, and in substance alleges that about June 1, 1930, the tenant (appellant’s mortgagor) abandoned the property in question, and that Mr<s. Head thereupon took, possession thereof and has since held possession adversely to appellant and all the world. The agreed statement of facts in this regard is to the effect that the controversy between Mrs. Head and the tenant (and others not necessary to note here) was settled under the terms of the judgment of November 10, 1930, under which an order of sale was issued and the property was purchased by Mrs. Head “and possession thereof was turned over to her, and she has had possession of such property in her building since said time, claiming it as her own, and that on December 19,1930, Mr. A. H. Armstrong, representing the Liquid Carbonic Company, was notified of such sale, possession and claim.” The agreement further recites:

“That the possession taken by the plaintiff, Mrs. Mary E. Head, as set forth hereinabove, was an actual and visible appropriation of the property commenced and continued under a claim of right inconsistent with and hostile to the claims of all others, that such possession and claims since that date have been continuous; that no other suit or suits have ever been instituted against her to recover the possession or to foreclose any lien or liens on said property or any part thereof by defendant Liquid Carbonic Company, except as known to the court in this case.

“That defendant, Liquid Carbonic Company, received notice on December 19,1930, that plaintiff, Mrs. Mary E. Head, was claiming the property then in her possession on general principals, and that she did not recognize the validity of said defendant’s mortgage, but that defendant Liquid Carbonic Company had never received notice of any particular claim on the part of plaintiff, Mrs. Mary E. Head, by reason of which she could or might have then had any valid right to said property or any part thereof unincumbered by the chattel mortgage of Liquid Carbonic Company, except as pleaded in this case and shown by the orders, judgments, writs, and returns herein, and those other papers which may be hereto attached and incorporated in this agreement.

“It is further agreed that on November 10, 1930, W. H Logan turned over said property to the plaintiff, Mrs. Mary E. Head, in payment of the rent then due Mrs. Head and in satisfaction of her landlord’s and chattel mortgage liens, said turning over and transferring taking place by parole and consummated by the order of sale and sale thereunder as hereinabove set out and of which transfer the Liquid Carbonic Company has not heretofore been advised of, except as contained in the pleadings.”

A¥e are unable to conclude from the above statement‘that Mrs. Head acquired any title to the property by limitation. When she filed the suit against appellant, asserting the superiority of her landlord’s lien to any claim which it might have, she put in issue the validity of its claim, and the judgment which she recovered was, until set aside, a complete bar to any action it might bring for the property. When that judgment was set aside by this court, it destroyed the title which Mrs. Head acquired to the property under the execution sale, and left the matter in the same status it was prior to the rendition of that judgment. See Cleveland v. Tufts, 69 Tex. 580, 7 S. W. 72; also 3 Tex. Jur., pp. 1333-1338, §§ 935-38.

In so far as' concerns appellant’s cross-action and its right to affirmative relief, it may be conceded that limitation was not tolled by the filing of Mrs. Head’s suit. This cross-action, however, was predicated upon an instrument in writing, as to which the four-year statute applied (Rev. St. 1925, art. 5527), and was filed well within the limitation period. The lien followed the debt, and was not barred so long as the debt was not barred. The only theory upon which limitation could be asserted would be as regards the title to (not the lien upon) the property; and, as stated above, we are clear in the view that, since Mrs. Head brought suit, not for title, but to foreclose her lien, and in the suit put in issue appellant’s claim, and recovered judgment of foreclosure against it, she could not assert a limitation title to the property wholly inconsistent with the theory upon which she brought the suit and upon which she obtained judgment and possession through foreclosure under a sheriff’s deed.

There is another equally valid ground which defeats appellee’s recovery. The agreed statement shows that, in so far as her possession was obtained directly from the tenant, it was in parol and was “consummated by the order of sale and sale thereunder,” and that the only notice appellant had of her claim was what the record showed. One who purchases mortgaged chattels from the mortgagor or under execution against ¡him only acquires the equity of redemption; that is, the legal title subject to the mortgage debt. Brooks v. Lewis, 83 Tex. 335, 18 S. W. 614, 29 Am. St. Rep. 650. There was nothing tortious in Mrs. Head’s possession, so far as appellant was concerned; and, in so far as it may be regarded as hostile, such hostility was referable to and consistent with her claim of title under her judgment' of foreclosure purchase, which she vigorously asserted until it,was set aside by this court and review was denied by the Supreme Court. Her title and possession, acquired from the mortgagor, was only his title and possession. She stood in his shoes as regards the property, clothed with every right thereto which he had, and subject to every charge and liability against it in his hands. Skaer v. Bank (Tex. Civ. App.) 293 S. W. 228 (error refused). So long as the debt was not barred, the lien securing it was not barred; and ap-pellee could not, in any event, acquire a title by limitation independent of the lien, without notice of such claim brought home to appellant, which notice the record negatives.

In so far as title to the property in issue is decreed in Mrs. Head as against appellant, the trial court’s judgment is reversed, and the cause is remanded, with instructions to the trial court to enter judgment of foreclosure upon the mortgaged property in favor of appellant for the amount of its judgment, such foreclosure to be superior to the title or.claim of Mrs. Head or any other party to the suit. In other respects, the trial court’s judgment is undisturbed.

Reversed and remanded in part and in part affirmed.