Ellis v. Singletary

45 Tex. 27 | Tex. | 1876

Lead Opinion

Roberts, Chief Justice.

This is a suit brought ou a note by Singletary, for the use of Wynne against W. H. Clark, one of four makers of a joint and several note, the other three being dead, to recover a judgment against Clark for the amount due on said note, and against John Ellis, to subject land to which he has the legal title, to a vendor’s lien. Plaintiff"recovered a judgment. Clark did not appeal, — Ellis did. The matter in issue is, whether or not the judgment subjecting the land to the vendor’s lien, in discharge of the recovery against Clark on the note, is erroneous, as contended by Ellis, who has appealed.

The errors assigned are numerous, and cover all possible grounds of" error that can be raised upon the proceedings in the record; and it will suffice to consider such questions as properly arise under them, without following them in detail.

It is contended by Ellis that no vendor’s lien attached to the note sued on in the hands of the plaintiff". The land was sold by Ellis to Kirksey, for which he took four notes, payable to himself, one of which he transferred to Hogue, in payment of a debt, and Hogue, in payment of a debt, transferred and indorsed it to Robinson, Singletary & Co., of which firm Singletary was the surviving partner. It was proved that this note expressed that it was given for the land known as the Cedar Landing tract., on the Trinity river. Afterwards, Kirksey sold the land to Howell Holliman, who executed three notes to Ellis, in place of the three Kirksey notes still held by him; and after he went into possession of the land under a deed from Kirksey, gave his note, signed also by Clark and two other Hollimans, to Robinson, Singletary & Co., in exchange for the Kirksey note held by them. This substituted note expressed that it was given for the Cedar Landing tract of land. It was proved by Hogue that he, Kirksey, and Ellis knew of this substitution, and that he and Kirksey desired it to be done. It was proved by Robinson that in receiving the Holliman note in exchange for the Kirksey note, it was expressly understood between him and Howell Holliman, who made the exchange with him, that the vendor’s lien on the land was still retained, and that the other makers’ names on the note were only an additional security for its payment; and further, that Hogue advised him to retain the vendor’s lien. The evidence in support of these facts is sufficient to support the verdict of the jury; and therefore they must be regarded by this court as established, in considering the questions of law arising upon them.

The mere fact of substituting the Holliman note for the Kirksey note held by Robinson, Singletary & Co., did not destroy the lien, if it then existed. (Pinchain v. Collard, 13 Tex., 336.) That the indorsement of the note by Hogue to Robinson, Singletary & Co. did not release the lien is not to be presumed, for it would have been contrary to the interest of both parties. Such a presumption is farther rebutted by Hogue’s desire for the substitution, and his advice to them to retain the lien on the land in the exchange of the notes. ^*

There being sureties on Howell Holliman’s note, thus substituted, might, if unexplained, raise a presumption that the vendor’s lien was released. When land is sold, and the purchase-money is not paid, the lien attaches as matter of course. Its release must he shown by such facts as show that it was intended by the parties not to he relied on as a security for the unpaid purchase-money. Talcing a note, being mere evidence of the debt, is not such a fact. Taking sureties on the note is a fact tending in that direction, from which such intention may he presumed. Hot, however, if there is that stated in the note which shows it was not so intended, as in this case, where it is expressly stated that it was given for the Cedar Landing tract, which could have been for no other purpose than to indicate the intention of the contracting parties not to release the lien by the additional security; and if tins should be regarded ambiguous in its import, its object to that end was fully explained by the evidence of Eobinson, who was properly allowed by the court to explain the circumstances under and purpose for which that expression was inserted in the note given by Holliman, just as he might explain that the note given for the land, if it had not been so expressed, without violating any rule of evidence.

The release of the lien is a question of fact dependent upon the evidence establishing the intention of the parties not to rely on the land as a security, or as one of the securities, for the payment of the unpaid pmchase-money. (Parker County v. Sewell, 24 Tex., 238 — referring to Macreth v. Symmonds, 15 Ves. R., 384; 4 Kent’s Comm., 171; 2 Story’s Eq. Jur., 590, 7th ed.)

We cannot say that the evidence was insufficient to establish that the lien was not released, as found by the verdict and sanctioned by the judgment of the court.

The next question arises upon the re-acquisition of the land by Ellis through Pollard.

Holliman and wife conveyed the land to Pollard, for ten thousand dollars in Confederate money paid down, under a promise to take up the notes which constituted a lien upon the land. Three of the Holliman notes that had been substituted for the Kirksey notes were in the hands of Ellis, only one of which was paid in Confederate money, by Holliman to Ellis, and one of said notes was then in the hands of Eobinson, Singletary & Co.

The evidence as to whether Pollard had notice of the last-named note at the time of his purchase, though conflicting, is sufficient to sustain the finding of the jury in favor of it.

Pollard, rather than pay off the notes, transferred the land, with some stock on it, to Ellis, for three hundred dollars in gold, he then owning two of the Holliman notes for §1,312.50, for which the land was bound.

It is contended by Ellis that he holds the legal title through a bona fide purchaser for a valuable consideration; and if the evidence is against him in that, by the notice to Pollard that still he has obtained the legal title, and holds it by a superior equity, by virtue of his two unpaid notes, which constituted the moving inducement for Pollard to convey to him for three hundred dollars; and that at least, having set out the notes in his answer, the court erred in not submitting a charge to the jury as requested by him, which would have enabled the jury to find a verdict which would have required the court to have enforced the lien of his two notes on the land concurrently with that of the plaintiff’s note. As to the first proposition, it is not perceived how his obtaining the title from Pollard would perfect his right to the land by virtue of his lien, when that title was acquired under notice of plaintiff’s lien, or of the facts which constituted such lien, Pollard also having such notice; all which is so established by the evidence, and confirmed by the verdict, as not to be disputed on error in this court.

As to the second proposition, the same answer may be given as was given by the coind below in refusing the charge ; which is, that it was not applicable to the case. The charge requested was, in effect, that the jury should find whether or not his notes constituted a lien upon the land, if they so found as to note of plaintiff. The reason why such a charge was not applicable to the case was, that the notes were not pleaded in a way to indicate the design of making them the founds tion of an adjudication and decree in this suit, partitioning the interest in the land between those having hens, by a sale of it, and a division of the proceeds proportioned to their respective rights.

But his notes were recited in explanation of the purchase from Pollard, and to fortify the small consideration given to him for the land.

A further reason was, that other facts shouldhavebeen stated by Ellis in that connection, particularly the present value of the land, and anything else that would have shown it to be inequitable to appropriate a disproportionate amount of the value of the land in satisfaction of the lien of the one note sued on. As, for instance, if it were alleged and proved that the land is now worth only the amount of this note, it might he inequitable to allow it to be appropriated to the payment of this note, when there were two other notes of the same size in Ellis’s hands that had not been paid. In that view also it would have been proper for Ellis to have consented to hold his legal title in trust, subject to the disposition of the court, in satisfaction of all of the valid liens that might be established in the suit.

If, however, the land was worth ten thousand dollars, the enforcement of a valid lien for about one fifth of its value would not have the effect to exclude Ellis from the benefit of his liens, for double that amount already seemed by his legal title, without a suit from Pollard. These allegations were not made in the answer so as to raise the equity in favor of Ellis, and put the court in motion to give him such affirmative relief. He did not put himself in the attitude of aiding the court to adjust and to satisfy the equities, but preferred rather to stand upon his legal rights in the defensive as a legal cover and protection to whatever equities he had. So the case is exhibited in the pleadings and evidence throughout.

The next question arises upon the effort of Ellis to take shelter under Billingsley, as a bona fide purchaser for a valuable consideration, without notice of this lien attaching to the note sued on.

Giving the legal effect to the facts, rather than a minute detail of them on this question, after Ellis was in possession of the land under the Pollard deed, Billingsley obtained a judgment against him for a debt for an amount over four hundred dollars; had the land levied on as Ellis’s property, and bought it at the sheriff’s sale without any notice of the lien secured by the note of Singletary, on which this action is brought; after which Ellis got a conveyance of the land through his agents, Jagers, Byrd & Co., for an amount something over two hundred dollars.

It is contended by Singletary that as Billingsley was a judgment creditor, and had his hid for the land credited on his judgment, thereby giving no other consideration for the land than his antecedent debt,.embodied in his judgment, he did not stand in the position of a bona fide purchaser for a valuable consideration, as against this lien, of which he had no notice.

The reason of this rule is said to be, that “the judgment creditor shall be deemed entitled merely to the same rights as the debtor had, as he comes in under him, and not through him; and upon no new consideration, like a purchaser.” (Burgh v. Burgh, Rep. Temp. finch, 28; see note 2, Story’s Eq. Jur., sec. 410, p. 388, Redfield edition.) This principle, however, is strongly combated in the case of Bayley v. Green-leaf, (1 Wheaton U. S. Rep., 46,) where it is attempted to be shown to be applicable to bankrupt creditors and the like, and not to creditors generally, who have obtained judgments and become purchasers under them; for otherwise their judgment liens would avail them nothing. This is referred to with approbation by Chancellor Kent, as entitled to general assent. (4 Kent’s Comm., 154.)

It does not follow from this principle, however, that Ellis is in a position to protect himself, as Billingsley might have done; for he sold the laud to Kirksey, and traded one of the purchase-money notes to Ilogue, and he assigned it to Robinson, Singletary & Co., who took in exchange for it Holliman’s note, now sued on, the lien being preserved all along, and Ellis was proved to be cognizant of the facts pertaining to it; and having, with such notice, obtained the title to the land from Billingsley, he seeks thereby to defeat the lien of the note that he put in circulation, and for which he obtained a full consideration.

Mr. Story, after stating the rule that one who has notice, deriving title through one who had no notice, is thereby protected in Ms right, proceeds to say: “It is wholly immaterial what the equity is, whether it is a lien or an incumbrance, or a trust,- or any other claim; for a bona file purchase of an estate for a valuable consideration purges the eqmty away from the estate from all persons who may derive title under it, with the exception of the original party, whose conscience stands bound by the violation of his trust and meditated fraud; but if the estate becomes revested in him, the original equity will reattach to it in his hands.” (1 Story’s Eq., 420, p. 388, Red. ed., referring to Burgh v. Burgh, Rep. Temp. Finch, 28; Kennedy v. Daily, 1 Schr. & Lefr., 379, and other cases.)

This exception to a general rule seems to be peculiarly applicable to this case, as it is established by the evidence and as it is confirmed by the verdict, as it prevents one from defeating a claim, held by another upon a valuable consideration, obtained in good faith m the comse of trade, for wMch he has received full value when he put it in circulation, and had full notice that it was in the hands of plaintiff when he obtained the title from Billingsley, by paying money for it, which simply discharged a debt wMch he was hound to pay at all events.

The questions discussed embrace, as it is believed, all the matters complained of that are thought to require a serious consideration; and although it might have been more satisfactory if the case could have been shaped and conducted so as to have settled and adjusted the equities of the respective parties, still, as the case is presented in the record, we do not conceive that there is any material error, requiring a reversal 'of the judgment, and therefore it is affirmed.

* There was a difference in the amounts of the two notes exchanged : one for §1,250, and the other for §1,312.50, which, had it been of any importance in evidencing a release of the lien, might have been explained more fully by Hogue, who seems to have falten some part in each and all of the transactions involved in this suit.

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Rehearing

G. W. Davis,

for rehearing.

Appellant asks the court to grant a rehearing in this cause. To grant a rehearing that the court may re-examine the grounds of its decision, could not, it is believed, work any possible injury to any one.

Under such a view of the case, we ask the leave of the court to submit such reasons as have suggested themselves why a rehearing should be granted. If it shall he found upon close examination that the equities of the case have not been reached, or that substantial justice has not been done, then of course a rehearing should he granted.

It is submitted as a general principle that whatever equities develop themselves or arise out of the facts alleged and proven, are the real equities in a case. (Fonblanque’o Eq., §§ 2 and 3; 1 Story’s Eq., §§ 26-32.)

The form and manner in which facts are alleged, it is believed, are not so material as that the facts themselves shall be alleged.

If the facts show equities, the relief they call for, it is submitted, should he granted. (Wells v. Fairbank, 5 Tex., 585; Horne v. Black, 24 Tex., 293.)

Hor would the fact — as may or may not have been the case with appellant in tMs cause — that a party mistook his rights, preclude the court from granting the relief the averments and proof showed he was entitled to. (Hipp v. Hutchett, 4 Tex., 24; Spann v. Sterns, 18 Tex., 570; Smith v. Clopton, 4 Tex., 114; Smith v. Corcoran, 7 La., 52; Trammell v. Watson, 25 Tex. Supp., 216.)

In this case appellant avers that the two Holliman notes he holds were given for part of the purchase-money of the land described in the pleadings; that said notes belong to Mm and are unpaid, and that he has a vendor’s lien upon the land in question to secure their payment; and he prayed for “general and equitable relief in the entire premises.” Under tMs prayer, it is submitted, the court would have power to grant full relief and all the relief the equities in the case called for. (Kelly v. Payne, 18 Ala., 371; Bourke v. Vanderlip, 22 Tex., 223; Filkin v. Ferris, 18 Barb., 581; Texas v. Hardenberg, 10 Wallace, 86, 89.)

Under tMs prayer, being one for general relief, the court might not'only grant full relief, but different relief. Where a party mistook the law and his rights under it, and prayed for particular relief that could not be granted, and also prayed for general relief, it is believed the court could refuse the particular relief prayed for, and, under the prayer for general relief, could grant the relief the party was entitled to, though that relief might be different from the relief prayed for. (1 Danl. Ch. Pl. & Prac., p. 437; Bailey v. Burton, 8 Wend., 353; Kelley v. Payne, 18 Ala., 371; Hiem v Mill, 13 Ves., 119; 17 La. Ann., 37; Lingan v. Henderson, 1 Bland., (Md.,) 251; Wiswell v. 1st Cong’l Church, 14 Ohio State, 31.)

Moreover, in equity, it is conceived, the rule of pleading applicable to the defendant’s answer is less strict than that which governs the plaintiff in framing his bill. (Story’s Eq. Plead;, § 255; Crain v. Barnes et al., 1 Md. Chancery, (Johns.,) 155-7; Ory v. Winter, 4 La.; (Martin,) N. S., 279 to 283; Cunningham v. Wheatly, 21 Tex., 185.)

That the court below erred in refusing to give the following charge asked by appellant:

“ In the event the jury should find for the plaintiff', then they will further find whether the two notes given in evidence by Ellis, signed by Holliman, were executed by Howell Holliman in part payment of the purchase-money of the land described in plaintiff’s petition, and by the mutual agreement of said Holliman, Kirksey, and Ellis, were exchanged for the Kirksey notes previously in the hands of Ellis as the original vendor of said land.”

The refusal of the court to give this charge took away from the jury the consideration of the appellant’s rights, and put it out of the power of the court to decree upon the verdict the relief appellant was entitled to.

If this charge had been given, it is assumed — for the proof abundantly warrants the assumption — that the jury would have found affirmatively that the two Holliman notes owned by appellant were unpaid, and were given in part payment of the purchase-money of the land in controversy; and then upon that verdict the court could have decreed full equitable relief to both appellant and appellee, and decreed the land to be sold and the proceeds of the sale divided pro rata between appellant and appellee. The propriety of giving this charge is particularly enhanced when we consider the nature of the plaintiff’s action, and especially the averments of his last amendment. (Smithwick v. Andrews, 24 Tex., 494; 17 Tex., 558, 559; Dogget v. Rankin, 31 Cal., 326-328; Gilkey v. Peeler, 22 Tex., 669; Chamblee v. Tarbox, 27 Tex., 146, 147.) The verdict of the jury is erroneous, because it is not responsive to the whole of the case made by the pleadings and the proof, but only embraces the rights of the appellee, and does not embrace or respond to the rights of the appellant.

That the verdict of the jury would have been different had the above charge been given, is manifest from the verdict itself, which is as follows: * * * * *

“ We the jury find that the note sued on was given in part for the purchase-money of the land described in the plaintiff’s petition, and that the plaintiff’ has a vendor’s lien thereon”— evidently implying under the case made that appellant’s two Holliman notes were given for the unpaid balance of the purchase-money.

It may be well enough now to look a little closely into the reason assigned by the court below for refusing the charge asked. The reason assigned is, “because the charge is not applicable to the case.” Let us see how well founded that reason is. If a party mistakes the law and his rights under it, and states his rights in the form suggested by that mistake, it is submitted that the court would not be precluded by the form in which his rights or the facts upon which they rest were stated, from granting the relief the facts intrinsically and inherently entitled him to.

The defendant’s answer was not excepted to by the plaintiff’; and his proof as to the said Holliman notes having been given as substitutes for the original notes of Kirksey, (Ellis’s immediate vendee, Holliman being his sub-vendee with notice,) was in no wise objected to. And under such circum stances, it would seem, defendant was entitled to particular liberality, when it was apparent the ends of justice required it. (18 Barb., 581.)

The insufficiency of the reason assigned, it is believed, will be more manifest upon taking into consideration the fact that the court below admitted appellant’s evidence to establish his rights as alleged, and then refused to charge the law applicable to the facts he had been permitted to prove.

Appellant’s equities existed and were not affected or changed by the purchase from Pollard. "Whatever those equities were before the purchase, they remained afterwards. That before the purchase from Pollard appellant’s right or equitable ownership of the land in question was the right to subject the land to the payment of his two notes, (waiving the doctrine of superior right in Ellis as original unpaid vendor,) if the land should sell for enough to pay all three notes; and if not for enough to pay all of them, then for Ms pro rata share of the purchase-money. Before the purchase from Pollard the appellant had an equitable interest in the land, to secure the payment of his two Holliman notes, and appellee had an equitable interest in the land to secure the payment of his note, while Pollard had the naked legal title. After the purchase from Pollard, appellant had the legal title acquired from Pollard, and the equitable right to have his two notes paid out of the land; and the appellee had the equitable right to have his note paid out of said land. That appellant’s equities were not affected by the purchase from Pollard will be more manifest from a wider view of the principle stated. Suppose appellant before his pinchase from Pollard had transferred his two Holliman notes to a third party: would not such third party have had the right after the pinchase from Pollard to enforce Ms vendor’s lien against the land and have it sold for the payment of his two notes? If he would have that right, upon what would such right rest? Would it not be because the vendor’s lien was an incident to the note to secure its payment, and followed it into whosesoever hands it went ? Would not that incident attach to the notes and follow the ownership whether in one person or another? The ownership being in appellant, what good reason can be given why the incident should not attach to them in his hands as against other outstanding equal liens or equities, whether he be dual or single ? (Holloman v. White, 41 Tex., 62; Jackson v. Hill, 39 Tex., 493.)

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Rehearing

On Motion for Rehearing.

Roberts, Chief Justice.

In addition to what is said in the opinion, it may be added that the defendant Ellis, in his amended answer, presented and relied on three distinct defenses to defeat the suit of the plaintiff as to the vendor’s hen upon the land.

1st. That the vendor’s lien had been waived on the original note by its assignment, and had been lost by the substitution of the Holliman note sued on, and by taking sureties upon the substituted note.

2d. That Ellis had a legal title through Pollard, a purchaser without notice of the lien attaching to the land by this note. In this part of the answer the two 'notes held by Ellis were set out ostensibly in explanation of the reason why Pollard would make a sale of the land to him for a very small consideration, in support of the validity and good faith of said sale. When presented in that point of view, and for such a purpose, the plaintiff may have had no occasion to make any defense against them. Had these notes been made the chief ground of an equitable defense, separately and distinctly presented in the nature of a cross-bill seeking affirmative relief, instead of being made, as they were, merely incidental and auxiliary to a legal defense, then plaintiff would have had fair notice, and might have shown, if he could, that the two notes held hy Ellis had been paid, or from some other cause were not entitled to a proportionate share of the proceeds of the land, if sold to discharge the liens upon it. The fact that, as the case stands upon the record now, it appears improbable that he could have done so, does not alter the question as one of pleading. Each party to a suit has a substantia] right to be confronted with pleadings of his opponent, so shaped as to give him reasonable notice of what is designed by them. As these notes were pleaded in connection with and as part of a well-defined separate defense of legal title under Pollard, it could hardly have been anticipated before the trial that they were pleaded in the way of a cross-action for affirmative relief on the part of Ellis; and hence the plaintiff could not be expected to have made any defense against said notes in reference to that view of the case, either in his pleading or in his proof.

3d. That Ellis had a legal title through Billingsley, who was a bom fide purchaser without notice of this lien.

After the pleadings have been made up and the evidence has been submitted on the trial, a party should not be allowed, by asking a charge of the court, to give a direction to the case of which the opposite party was not fairly notified by the pleading before the trial commenced.

Motion overruled.