Holloman v. White

41 Tex. 52 | Tex. | 1874

Lead Opinion

McAdoo, J.

This cause seems to have been instituted by the appellant as a means of strengthening his title to the land, which was involved in the cause of Holloman v. F. Smith and Wife, (No. 214.)

It is a proceeding to compel John P. White to execute a deed of trust by sale which had been imposed by Smith and wife on the same property in 1858, White being the trustee named in the deed of trust. This deed was executed by Smith and wife to secure debts due to other parties. The appellee had, by purchase from Rust, become the owner of the debts thus secured, and the deed of trust had been transferred to him.

In this suit, on the day the case was called for trial, Smith and wife intervened, pleading the statute of limitations against the debts so secured, wrongful holding of the property in controversy, a plea of payment of the debts and of tender of payment, and that the appellant had been discharged in bankruptcy, and had therefore no right to maintain suit for said debts.

The appellant denied every allegation of the appellee except that of his bankruptcy, and to that allegation he pleads that the property in controversy had been set aside to him by A. M. Jackson, his assignee in bankruptcy, and together therewith the debts and deed of trust embraced in this suit, as entering into and affecting his title thereto, the appellee, French Smith, being notoriously insolvent at the time.

One of the notes secured by the deed of trust was not barred by limitation when this suit was instituted. The proof failed entirely to show that any of the debts had been paid; the proof failed to show a legal tender of the amounts due. The proof, we think, amply showed the purchase and payment for the mortgage debts by the appellant.

The deed of trust was a proper charge on the estate, being complete in its terms and in its execution. And we think the appellant would have been entitled to the relief sought but for the plea of his bankruptcy.

He admitted the fact of his bankruptcy. His plea that the deed of trust had been assigned to him, as he alleges in his answer, we think, would have availed him, if it had been followed up by the proof. But we have looked in vain in the statement of facts for proof on that subject. Without such proof it is clear he could maintain n'o suit upon the debts or mortgage, they having passed to his creditors on his being adjudged a bankrupt.

Inasmuch as the cause must be affirmed, because the proof shows no cause of action on the part of the appellant, it will be unnecessary to notice the several assignments of error relied on by the appellant for a reversal of the judgment.

The judgment of the District Court is affirmed.

Opinion rendered October 14, 1873.

On Rehearing.

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Rehearing

Moore, Associate Justice.

This case is before us on a motion filed at the last term of the court for a rehearing on a judgment rendered by our predecessors, which motion was by a special order of the court continued to the present term.

The appellant filed a bill against the appellee, White, to enforce the execution of a trust conferred upon him by a deed executed by the appellees, French Smith and wife, to secure the payment to one F. Q-. Roberts of three notes therein described, at the time specified in said deed, which said notes, he alleged, had been assigned and transferred to him, and that he was thereby the beneficiary of said trust deed.

The defendant, White, answers by a general demurrer, and for special exception says that plaintiff was, at the time of the institution of said suit, declared a bankrupt, and has subsequently been so adjudged, &c.; and, among other matters, alleges that Holloman had purchased the land mentioned in the trust deed af execution sale, and that he had paid off and discharged the debts secured by said deed out of the money for which the property was so sold by the sheriff; that he, defendant, previous to the commencement of the suit, tendered said Holloman the money secured by said deed, who refused to receive it, and admitted that the debts had been fully paid; that Smith and wife had renounced and repudiated said trust, and claimed that the debts had been paid, and the notes secured by said deed were barred by the statute of limitations ; also that Holloman had taken possession of the property after said sheriff’s sale, converted the rents and profits to his own use, whereby the debts secured by the trust deed were fully paid. And, in connection with the matters set up in his answer, it seems apparent that subsequently to the sheriff’s sale at which Holloman purchased the land upon which the trust deed was given, a controversy has arisen between him and Smith and wife as to the validity of the title" acquired by appellant through his purchase at said sale.

After the parties had announced themselves ready for. trial, as appears from the hill of exceptions, Smith and wife were permitted to intervene. They pleaded, among other defenses, that the" debts secured by the deed were barred.by limitation of four years; that the property conveyed by the deed was their homestead, (no question, however, was made as to the due execution of the deed by the wife;) that Holloman had taken unlawful possession of the property under the sheriff’s sale, and had appropriated the rents and profits, which had largely overpaid the notes secured, and asked a judgment against him for the amount claimed to be due them thereby. They also allege that they had brought suit against Holloman for the land embraced in the trust deed, &c.

To the answer of the defendant, White, appellant, demurred, and made replication, in which, with other matters to which we need not here specially refer, he said, “ that it is true, as alleged in said answer, that at the institution of this suit proceedings were pending to force petitioner into bankruptcy, and that since he has been adjudged a bankrupt.” But he alleges that the property mentioned in said deed of trust made the basis of this suit, together with all of the liens calculated to strengthen the title thereto, was duly and legally set apart to him by A. M. Jackson, the assignee in bankruptcy of petitioner, as the homestead of petitioner, exempt from forced sale, and not liable to distribution among creditors by said assignee.

On the trial a jury was waived, and by consent of parties the cause was submitted to the court. Whereupon the demurrer of the defendant was overruled, and without action on the demurrer of the plaintiff to defendant’s answer, it was adjudged that plaintiff take nothing by his suit, and that defendant, White, as trustee in said deed, be forever enjoined and restrained from selling the property described in said deed.

In the opinion of our predecessors, which we are called upon to consider for the proper determination of the questions now before us, the court seem to be of the opinion that the judgment should be reversed but for the admissions in appellant’s replication to appellee’s, White’s, answer, admitting that he had been adjudged a bankrupt since the commencement of this suit; but by reason thereof, and the failure of appellant to prove, as he alleged in connection with his admission of bankruptcy, that the deed of trust had been assigned to him, they were of opinion, it appeared, that he could not maintain the suit. In the conclusion at which our predecessors arrived on this point, in the aspect in which it is presented by the record, we cannot concur. While we cannot tell from the record upon what ground the case was decided in the court below, an inspection of it makes it quite evident it was not upon the ground upon which it is affirmed in the opinion of this court at the last term; nor could the court below have properly rendered the judgment which it did upon the hypothesis of the debts and trust upon which this action is founded having vested in the assignee by appellant’s being adjudicated to be a bankrupt after the commencement of the suit. For if so, the assignee should have been made a party before the court should have rendered judgment upon the merits; and on the failure of appellant to prove the assignment of the trust deed to him, the court should have either ordered a continuance that the assignee might be made a party or have rendered judgment abating the action.

It is to be observed that there is no allusion whatever in the statement of facts to appellant’s bankruptcy, and it 'is only by an inspection of the pleadings that this point comes to the knowledge of the court. But how stands the matter when we look to the pleadings? Appellant admits he has been adjudged a bankrupt since the commencement of his suit, but in the same connection he says the subject-matter of the suit has been set apart to him by the assignee. Surely, if by the adjudication of bankruptcy the right to prosecute the suit was taken from him, it must be admitted, as the case was still before the court without his assignee having been made a party, the assignment to him invested him with it. It is true, by the rule of pleading and evidence, when matter is pleaded by one party to which the other replies by confession and avoidance, evidence is unnecessary to prove the matter confessed, and the burden of proof of the avoidance is ordinarily upon the party pleading it. And if there was in the answer of appellee an averment of appellant’s bankruptcy, it might in strictness be held that by his replication he had admitted it, and that the allegations in respect to the assignment of the trust deed was matter in avoidance, which must have been sustained by proof by the appellant to enable him to escape from the legal consequence of this admission of his bankruptcy. But it will be noted from what we have heretofore said, whether this was its proper place or not, the only reference to appellant’s bankruptcy by appellee is in the demurrer, and this the record says was overruled by the court. The pleadings, therefore, do not show allegation by the one party and confession by the other, by which both are bound, which is necessary for the applicability of this rule. It stands simply upon the admissions in the pleading of appellant, and in such case unquestionably it does not operate as a legal conclusion unless what he has said, taken as a whole, warrants it.

An inspection of the statement of facts leads us to the conclusion that none of the matters of defense presented by the defendant or the intervenors are sustained by evidence, unless it is that insisting that relief asked by appellant should not be granted, for the reason that his equitable estate or interest under the trust deed had been merged in the legal title acquired by his purchase of the land at the sheriff’s sale. The principle here invoked is a recognized rule of common law in cases to which it is applicable, and courts of equity no doubt yield due consideration to it in cases to which it properly applies, unless there are special equitable grounds of relief against it, like any other rule of law. We cannot say that this case falls under this rule.

If we are to follow the construction of the common law, appellant only acquired an equitable title, the right of redemption, by his purchase under the execution sale; but if we hold that he got there by the legal title, as beneficiary under the trust deed, he took neither the legal nor equitable title to the land. Whether the trust deed carried the one or the other, the title conveyed by it vested, and is still, in the appellee, White. But as the intervenors, who are the parties interested, distinctly allege the title conveyed to appellant by the sheriff is illegal and void, they certainly cannot at the same time insist that the appellant’s debt is lost by the fiction of merger in this void title.

More than four years had elapsed from the time when two of the notes secured by the deed were due before the suspension of the statute of limitation in 1861; but as less than that time intervened from the date of the deed, whereby the justice of the claims is admitted, this ground of defense clearly failed. Other defenses were unsupported by evidence.

A jury having been waived, and the case submitted to the court, we might, under the practice of this court, reverse and render here the judgment for the appellant which the record before us would warrant; but as there seems some irregularity and confusion in the record, and it may be that the justice of the case can be better attained by this disposition of it, it is ordered that the rehearing applied for be granted, and the judgment reversed and the cause remanded to the District Court for further proceeding, in accordance with this opinion.

Reversed and remanded.

[Note;—Since reading the above opinion our attention has been called to the fact that the rehearing had been granted by our predecessors at the last term, which was not disclosed by the papers and record submitted to us. This is not deemed of sufficient consequence, however, to require us to remodel the opinion.]