Binford v. Snyder

• Citation: 189 S.W.2d 471
• Decision Date: 27 June 1945
• Docket Number: No. A-475.,A-475.
• Parties: BINFORD et al. v. SNYDER et al.
• Court: Supreme Court of Texas

Page 471

189 S.W.2d 471

BINFORD et al. v. SNYDER et al.

No. A-475.

Supreme Court of Texas.

June 27, 1945.

Rehearing Denied October 3, 1945.

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

Trespass to try title by Mrs. Lillie Violet Snyder and husband against the Citizens State Bank and others, wherein T. A. Binford and others brought a cross-action. To review a judgment, 184 S.W.2d 684, affirming

in part and reversing in part a judgment for plaintiff, defendants T. A. Binford and Mrs. Zoie Traweek bring error.

Affirmed.

Lewis & Knipp and Ernest A. Knipp, all of Houston, for T. A. Binford.

L. Edward Mooney, of Houston, and Luther Hudson, of Ft. Worth, for Mrs. Zoie Traweek and another.

Bryan, Suhr & Bering, E. H. Suhr, Richard Burks, Williams, Lee, Kennerly & Cameron, and Jesse J. Lee, all of Houston, for respondents.

SLATTON, Commissioner.

The judgment of the trial court granted a recovery of title and possession to Mrs. Snyder for 112.98 acres of land and denied a recovery to her of 89.23 acres, all the land being situated in Harris County. The judgment of the Court of Civil Appeals affirmed the trial court's judgment with respect to the 112.98 acres, and on account of an admission filed in the Court of Civil Appeals by Mrs. Snyder, affirmed the trial court's judgment with respect to a 20.84-acre tract of the 89.23-acre tract, and reversed the judgment of the trial court with respect to the remaining 68.39-acre tract, and rendered judgment in favor of Mrs. Snyder for the title and possession of said land. 184 S.W.2d 684.

T. A. Binford and Mrs. Zoie Traweek sought and obtained writs of error. The trial court submitted special issues to the jury embracing the controversy as between Mrs. Snyder and the Traweeks, and as between Mrs. Snyder and Binford as to the two tracts aggregating 89.23 acres. All issues submitted to the jury were answered favorably to Mrs. Snyder. However, the trial court granted Binford's motion for judgment notwithstanding the verdict. The first important question to determine is, Did Mrs. Snyder own the equitable title to the land in suit? It indisputably appears that Mrs. Snyder, through the assistance of E. C. Carnes, recovered judgment for title and possession of all the land in suit prior to her deeds of conveyance to E. C. Carnes. According to evidence contained in the record, and found by the jury to be true, the lands claimed by Binford and the Traweeks were conveyed by Mrs. Snyder to E. C. Carnes for the purpose of Carnes' selling the land for $26,000 cash. Carnes testified that Mrs. Snyder "deeded the property over to me in trust. * * * She gave it to me in trust to sell for her for $26,000.00." Under such an arrangement it is believed no beneficial interest in the lands passed from Mrs. Snyder to Carnes. The legal title passed to Carnes and the beneficial interest or equitable title remained in Mrs. Snyder. It indisputably appears that no consideration was paid by Carnes to Mrs. Snyder for the land. It may be inaccurate to designate the agreement between Carnes and Mrs. Snyder as an express trust; however, it appears that shortly after the death of her first husband Mrs. Snyder was aided in procuring the title and possession to her real estate by Carnes, and that he was given 20.84 acres of land, apparently in payment for his assistance. It seems that Mrs. Snyder trusted Carnes and had complete confidence in him. She was not related to him. Therefore, when she conveyed her property to him without consideration and there being no blood relationship existing between them, no intention of making a gift appears. A trust resulted to Mrs. Snyder, and whether the trust be an express or an implied one is immaterial, for the reason that in either class the equitable title to the property is in the actual owner and the legal title is in the trustee. We conclude, therefore, that as between Mrs. Snyder and E. C. Carnes the equitable fee in the land sought to be recovered in this suit is in Mrs. Snyder.

The jury found that Traweek and Binford purchased the land with knowledge (1) that Mrs. Snyder had an interest in the land; (2) that Carnes held the land for the purpose of sale only for cash. If the jury findings are true, and they were found to be well supported by the evidence by the Honorable Court of Civil Appeals, the purchase of the property by Traweek from Carnes, who was Mrs. Snyder's trustee, was fraudulent as to Mrs. Snyder. Traweek, under such circumstances, becomes also a trustee for Mrs. Snyder. The rule applicable to Traweek is thus stated in Ruling Case Law, Vol. 26, p. 1236:

"It is a well settled general rule that if one person obtains the legal title to property, not only by fraud, or by violation of confidence of fiduciary relations, but in any other unconscientious manner, so that he cannot equitably retain the property which really belongs to another, equity carries out its theory of a double ownership equitable and legal, by impressing a constructive trust upon the property in favor of the one who is in good conscience entitled to it, and who is considered in equity as the beneficial owner."

The conveyance of the land by Carnes to Traweek did not terminate the trust. The American Law Institute Restatement of the Law of Trusts, Vol. 2, p. 1059, Sec. 342(i), reads as follows:

"If the trustee transfers the trust property to a third person with the consent of the beneficiary, but the consent of the beneficiary was procured by fraud or other improper means, the trust will not be terminated."

The above-stated principle is applicable both to the Traweeks and Binford, because the jury found, as we have before stated, that they brought with knowledge of Mrs. Snyder's owning an interest in the land and that Carnes held the land for sale only for cash. The applicable rule as to them is well stated in Pomeroy's Equity Jurisprudence, 5th Ed., Vol. 4, pp. 102-104, Sec. 1048, which reads as follows:

"Wherever property, real or personal, which is already impressed with or subject to a trust of any kind, express or by operation of law, is conveyed or transferred by the trustee, not in the course of executing and carrying into effect the terms of an express trust, or devolves from a trustee to a third person, who is a mere volunteer (see s 747), or which is a purchaser with actual or constructive notice of the trust (see s 753), then the rule is universal that such heir, devisee, successor, or other voluntary transferee, or such purchaser with notice, acquires and holds the property subject to the same trust which before existed, and becomes himself a trustee for the original beneficiary. Equity impresses the trust upon the property in the hands of the transferee or purchaser, compels him to perform the trust if it be active, and to hold the property subject to the trust, and renders him liable to all the remedies which may be proper for enforcing the rights of the beneficiary. It is not necessary that such transferee or purchaser should be guilty of positive fraud, or should actually intend a violation of the trust obligation; it is sufficient that he acquires property upon which a trust is in fact impressed, and that he is not a bona fide purchaser for a valuable consideration and without notice. This universal rule forms the protection and safeguard of the rights of beneficiaries in all kinds of trust; it enables them to follow trust property,—lands, chattels, funds of securities, and even of money,—as long as it can be identified, into the hands of all subsequent holders who are not in the position of bona fide purchasers for value and without notice; it furnishes all those distinctively equitable remedies which are so much more efficient in securing the beneficiary's rights than the mere pecuniary recoveries of the law."

To the same effect, see Perry on Trusts, 7th Ed., Vol. 1, pp. 379-381, Sec. 217. The rule has been many times applied in this state. See Mansfield v. Wardlow, Tex. Civ.App., 91 S.W. 859, loc.cit. 863, writ denied; Alexander v. Harris, Tex.Civ. App., 254 S.W. 146, writ refused.

Having determined that under the facts of this case Mrs. Snyder owned the equitable title to the land in suit, the next question is, Can she recover such title in an action of trespass to try title under a statutory formal pleading, without specially pleading her equitable title? There seems to be confusion in the authorities on this question. It is believed the confusion is more apparent than real. In the early case of Easterling v. Blythe, 7 Tex. 210, loc.cit. 214, 56 Am.Dec. 45, it was held: "* * * in respect to personal property, the action may be maintained by the party in whom subsists the real ownership, irrespective of the question of whether his title be one of legal or equitable cognizance. And no reason is perceived why the same principle is not equally applicable to real property."

It was pointed out in that case that the court had previously determined "that an equitable title may be interposed by a defendant, to prevent a recovery, in an action of trespass to try title", citing the case of Neill v. Keese, 5 Tex. 23, 51 Am.Dec. 746, and the court further declared: "* * * and we see no reason why a plaintiff may not recover upon such title." Martin v. Parker, 26 Tex. 253; Hill v. Moore, 62 Tex. 610; Morris v. Rhine, Tex. Sup., 8 S.W. 315, loc.cit. 317; Wade v. Boyd, 24 Tex.Civ.App. 492, 60 S.W. 360, writ refused; Low v. Gray, 61 Tex.Civ. App. 487, 130 S.W. 270, 272, writ refused; Mason v. Bender, Tex.Civ.App., 97 S.W. 715; Tompkins v. Broocks, Tex.Civ.App., 43 S.W. 70; Betzer v. Goff, 35 Tex.Civ. App. 406, 80 S.W. 671; Texas Creosoting Co. v. Hartburg Lumber Co., Tex.Com. App., 16 S.W.2d 257, and many others. The confusion exists either through cases wherein the titles have been specially pleaded or in cases where equitable rights have been asserted as distinguished from an equitable title. See Groesbeeck v. Crow, 85 Tex. 200, 20 S.W....