Hampshire v. Greeves

• Citation: 143 S.W. 147
• Parties: HAMPSHIRE v. GREEVES et al.
• Decision Date: 07 February 1912
• Court: Supreme Court of Texas

Page 147

143 S.W. 147

HAMPSHIRE v. GREEVES et al.

Supreme Court of Texas.

February 7, 1912.

Error to Court of Civil Appeals of First Supreme Judicial District.

Action by L. Hampshire against W. B. Greeves to recover on notes and to foreclose a mortgage, in which Ras Landry was made a defendant, with a cross-action by Landry to quiet title, impleading the Beaumont National Bank and another on their warranties. From a judgment of the Court of Civil Appeals (130 S. W. 665) affirming a judgment for defendants, plaintiff brings error. Affirmed.

Crook, Lord & Lawton, for plaintiff in error. Smith, Crawford & Sonfield, R. A. John, and D. W. Glasscock, for defendants in error.

DIBRELL, J.

This suit was by L. Hampshire against W. B. Greeves to recover on two notes of $1,000 each, dated March 28, 1903, due March 28, 1904, and March 28, 1905, respectively, payable to plaintiff and secured by a deed of trust of same date on lot No. 409, block 57, in the city of Beaumont. Ras Landry was made a party defendant by plaintiff, who alleged Landry's claim "some kind of a lien on said real estate through and under the defendant, Greeves," which was "subject and junior to plaintiff's lien," and, in "the alternative," that Landry claimed "absolute title and ownership to said real estate and under a written conveyance from the Beaumont National Bank or its trustees or agents, executed subsequent to plaintiff's mortgage aforesaid, and that the Beaumont National Bank for its title claimed under an instrument of writing purporting to be executed by the said Greeves subsequent to the date of the execution of plaintiff's mortgage aforesaid; but plaintiff alleges the Beaumont National Bank claims no lien nor title nor interest to said property, and if defendant, Ras Landry, has any interest in said property, it is subject to the mortgage aforesaid, held by plaintiff. But to prevent a multiplicity of suits and to cut off the equity, if any, claimed by the said Ras Landry, he is a proper party to this suit." Defendant W. B. Greeves answered by general demurrer and general denial. The defendant Ras Landry answered by general demurrer, general denial, and by special plea that on June 11, 1901, the title to the lot in controversy was in one Stephen Geraci; that Geraci was the common source of both the alleged claims of the plaintiff and of the defendant's title; that Geraci on June 11, 1901, for the purpose of securing two notes, one for $1,000 and one for $1,065, due, respectively, on December 11, 1902, and on June 11, 1904, executed and delivered to Ras Landry as trustee for the benefit of J. W. Stokes a deed of trust on said lot. Afterwards, on June 18, 1901, Stokes transferred said notes, together with the mortgage lien securing them, to A. E. Broussard, and afterwards, on or about August 1, 1905, A. E. Broussard sold said notes to the Beaumont National Bank, together with the lien securing them, and that said bank while the owner of said notes and lien which existed before the defendant Greeves, plaintiff's mortgagor, acquired any title to said lot, requested the defendant Landry to sell the lot described in the deed of trust in accordance with its terms, for the purpose of paying off the indebtedness therein secured, and, while said bank was the legal and equitable owner of said notes, notwithstanding this said Broussard joined in this request to the trustee; that the lot in controversy was sold under the deed of trust on September 5, 1905, in accordance with law, and bought in by the Beaumont National Bank, and on the following day the trustee, Landry, executed a deed of conveyance to such purchaser, which was duly recorded in the deed records of Jefferson county; that the deed of trust under which defendant Landry claimed and derived title was made, executed, delivered, and recorded before the execution and recording of plaintiff's lien, and that the title of defendant Landry so acquired was superior and paramount to plaintiff's title, either legal or equitable, or any lien, claim, or demand that plaintiff has against the property. The defendant Landry further pleaded that after Geraci had given the deed of trust mentioned and while the same was a subsisting lien on the land in controversy on April 29, 1902, conveyed said property to the defendant Greeves, and that as a part of the consideration "Greeves, having theretofore assumed the payment of the Stokes note, secured as aforesaid by the deed of trust given by Geraci to Ras Landry, trustee," being indebted to the Beaumont National Bank in the sum of $5,070, on December 12, 1903, conveyed the property in controversy to Walter J. Crawford as trustee for the Beaumont National Bank, which deed of trust was recorded December 12, 1903, and prior to the record of plaintiff's mortgage, which took place May 3, 1904; that the bank took said mortgage in good faith and without any knowledge, actual or constructive, of any claim of plaintiff, and thereafter, on September 5, 1905, the Crawford deed of trust was foreclosed by sale thereunder and bought in by the Beaumont National Bank; that on December 7, 1905, the Beaumont National Bank and J. L. Cunningham, who had theretofore acquired an apparent interest in said property, conveyed same to the defendant Landry for $3,500 by their warranty deed; that, by reason of such sale and purchase, the defendant Landry became a bona fide and innocent purchaser for value of the property in controversy, and that the assertion of the pretended lien of plaintiff is a cloud upon his title, and prayed that said lien in favor of plaintiff be declared as such, and that he be quieted in his title to said land.

The defendants Beaumont National Bank and J. L. Cunningham having been impleaded on their warranty by defendant Landry, for answer demurred and entered a general denial to plaintiff's petition and defendant Landry's cross-action, and, after pleading substantially the matters and things pleaded by Landry and presenting such matters as made their title to the property in controversy good and declaring itself to be an innocent purchaser for value without notice, presented other pleas not necessary to be mentioned in this opinion, since the issues involved in such special pleas are not raised by the assignments of error in this court.

The cause was tried with a jury, and, after the introduction of the evidence, the court instructed a verdict for defendants, upon which judgment was entered. The cause was appealed in due time, and by the Court of Appeals on May 31, 1910, affirmed, and is in this court upon writ of error.

The first assignment of error presented by the plaintiff in his application for writ of error is as follows: "The Court of Civil Appeals erred in holding that, the defendant Ras Landry having been brought in as a lienholder or purchaser under the defendant W. B. Greeves, he had a right to set up the adverse title held by himself under the foreclosure of the Stokes' deed of trust, and in holding that the title asserted under the foreclosure of the Stokes' deed of trust is not an independent title to that of L. Hampshire acquired from W. B. Greeves by the deed of trust herein sought to be enforced, because, having been brought in as a lienor or purchaser under the defendant W. B. Greeves, the defendant Ras Landry had no right to set up adverse title in himself and have that litigated in this foreclosure suit." The fifth assignment of error is so closely related to that above quoted that the two will be considered together; the point made in the fifth assignment being that the Court of Civil Appeals erred in holding that the "sale by the trustee, Ras Landry, effectually foreclosed all right of appellant to redeem under the junior mortgage held by him because the right of redemption of a junior lienholder is not cut off by a procedure to which the junior lienholder is not a party."

From a summarization of the pleadings of the parties to this suit, it will be seen that the main question for determination is whether, under the circumstances and the facts as shown by the record, the defendant Ras Landry could plead as a defense to plaintiff's suit against Greeves for judgment on two certain notes and to foreclose a mortgage lien on the lot of land in controversy, his superior title to said lot of land emanating from a prior lien given by Greeves' vendor and by Greeves assumed to be paid the beneficiary of said lien and under whom Ras Landry secured his title. Differently and abstractly stated, is it permissible under our system of procedure, where one holds a prior lien on land with power of sale which has been foreclosed by the exercise of such power, to plead in bar of the right of the junior lienholder to foreclose such junior lien where the prior lienholder has been made a party to the foreclosure proceedings his title to the land acquired by sale under such prior lien? All the other questions presented by the assignments of error in this court are subordinate and collateral to the main question as above presented.

We are referred by counsel of plaintiff to the cases of Hinzie v. Kempner, 82 Tex. 617, 18 S. W. 659; Walraven v. Farmers' & Merchants' National Bank (Civ. App.) 53 S. W. 1028; Faubion v. Rogers, 66 Tex. 474, 1 S. W. 166. Those cases...