Delta County v. Blackburn

• Decision Date: 30 May 1906
• Citation: 93 S.W. 419
• Parties: DELTA COUNTY v. BLACKBURN et al.
• Court: Texas Supreme Court

Page 419

93 S.W. 419

DELTA COUNTY v. BLACKBURN et al.

Supreme Court of Texas.

May 30, 1906.

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

Action by Delta county against W. A. Blackburn and others. A judgment of the Court of Civil Appeals (90 S. W. 902) affirmed a judgment in favor of defendants, and plaintiff brings error. Reversed and remanded.

J. L. Young, for plaintiff in error. Jas. H. Robertson and Cochran & Penn, for defendants in error.

WILLIAMS, J.

The facts of this case, as shown by the evidence and found by the district judge and the Court of Civil Appeals, are as follows: On May 11, 1887, W. A. Blackburn purchased from Delta county its four leagues of school land, giving for the purchase money his note for $25,000, bearing interest at the rate of 7 per cent., payable annually in advance, the principal to mature at the end of 20 years with the right on Blackburn's part to pay it at any time after the expiration of 12 years from its date. The note and the deed executed by the county expressed this contract, the latter reserving a vendor's lien to secure payment of the notes. Blackburn entered into possession of the land, and paid the stipulated interest annually until May 11, 1899. At some time between that date and November 14, 1899, after his right to pay off the note accrued, Blackburn went to Cooper, Delta county, provided with funds and intending to exercise the option, unless he should secure a reduction in the rate of interest. He applied to the commissioners' court for a reduction of rate to 3 per cent., representing that the value of the land had so decreased that he would no longer pay interest at the rate of 7 per cent.; that he would throw up the trade unless they acceded to his request; that, if he did so, the county could not sue on the note, because of its phraseology, or recover any interest thereon until 1907. He did not inform them of the fact, to which he testifies, that he was prepared and intended to pay off the note if he failed to secure the reduction of interest. The commissioners would have preferred payment to the arrangement he proposed, had they known of his purpose. After a private consultation of the members of the court among themselves a proposal was made to him by one of the commissioners, speaking for the court in open session, that if he would pay $750 as the interest due on the note up to May 11, 1900, and the interest to accrue thereafter on said note at the rate of 3 per cent. as same annually accrued until May 11, 1907, they would pass an order reducing the rate of interest so due to 3 per cent. To this Blackburn and all of the commissioners assented, and the following order was entered upon the minutes of the court: "November 14, 1899. It is ordered by the commissioners' court that the interest on the Delta County school land note executed by W. A. Blackburn to said Delta county for the purchase money of land, be and the same is hereby reduced to 3 per centum per annum until paid." The $750 for the interest of 1899-1900 and all installments subsequently falling due under this arrangement were regularly paid as they fell due, by Blackburn, until his sale to Tucker as hereinafter stated, and, by Tucker and Laird, thereafter until May 11, 1904. The installment which should have been paid then was unpaid at the date of the institution of this suit, which was August 10, 1904, but was paid subsequently. October 6, 1900, Blackburn conveyed the land to defendant, J. E. Tucker, by deed which recited as a part of the consideration "the further consideration of said J. E. Tucker assuming the payment of the principal and all interest accrued and to accrue from and after October 1, 1900, of and upon a certain promissory note executed and delivered by me to Delta county, Texas, for the sum of $25,000.00 dated May 11, 1887, and due May 11, 1907, and which note originally bore interest at the rate of seven per cent. per annum, but which note, now, by virtue of an agreement between me and the commissioners' court of Delta county, bears interest at the rate of three per cent. per annum only," and which contained a general warranty of title against all claims, "save and except that no warranty is given against the lien of said Delta county upon the said four leagues of land to secure the payment of the note hereinbefore mentioned in favor of said county." On December 17, 1902, Tucker conveyed to defendant Laird one-fourth interest in the four leagues of land "in consideration of the said D. C. Laird assuming the payment of one-fourth of a certain promissory note (describing that before stated) and now bearing interest at the rate of 3 per cent. per annum." This action was begun by the county, as stated, August 10, 1904, against Blackburn, Tucker, and Laird, to recover interest upon the note at the rate of 7 per cent. from May 11, 1899, less the payments which have been made, and to foreclose the vendor's lien upon the land, upon the theory that, for a number of reasons, the chief of which is a lack of authority in the commissioners' court under the law to thus deal with the school fund belonging to the county, its action reducing the rate of interest is of no effect.

Section 6 of article 7 of the Constitution gave authority to the county to "sell or dispose of its lands in manner to be provided by the commissioners' court" and declared that the lands and the proceeds thereof, when sold, should be held by the county alone as a trust for the benefit of public schools. It further provided that the proceeds should be invested in bonds of the United States, the state of Texas, or counties in the state, or in such other securities and under such restrictions as may be prescribed by law, and that the county should be responsible for all investments. At the time of the transaction in question, the law did not authorize the investment of the proceeds of sales otherwise than in bonds. The Constitution, by section 55 of article 3, further provided: "The Legislature shall have no power to release or extinguish, or to authorize the releasing or extinguishing, in whole or in part, the indebtedness, liability, or obligation of any incorporation or individual to this state or to any county or other municipal corporation therein." All of these provisions must be kept steadily in mind and receive their proper effect in determining the question as to the power of the commissioners' court to make a valid agreement such as that relied on by the defendants. The power to sell or dispose of the lands in the manner to be provided by the commissioners' court is comprehensive and carries with it the right to do all things incidental to its proper exercise; but that provision of the Constitution must not be extended beyond its proper sphere of operation and made the pretext for doing things inhibited by the other rules prescribed which must also be respected in determining its scope.

Whether a sale shall be made for cash or on credit, and by executed conveyance or executory contract, are questions evidently committed to the commissioners' court, and, it may be conceded, that where a credit sale is made under an executory contract, the county, represented by its commissioners' court, is invested with the power over the title remaining in it, which an ordinary grantor would usually have under a like form of contract; that its power to cancel the sale for default in performance by the vendee, to resume its title and to resell would be as perfect as would be the power of an individual under like circumstances. This is the theory upon which the decision in the case of Waggoner v. Wise County rests. 17 Tex. Civ. App. 220, 43 S. W. 836. Wise county sold by executory contract to Waggoner and Halsell whose title passed to Lynn and from him to Jameson, the two last assuming, in turn, the obligation which had been given by Waggoner and Halsell for the purchase money to the county. After that obligation matured, the county agreed with Jameson to take in lieu of it his note, payable in future, with a mortgage on the land to secure it, and to release Waggoner and Halsell. This was held to be, in legal effect, a cancellation of the sale to Waggoner and Halsell and a resale to Jameson. Thus viewed, the action of the county was but the exercise of its power as vendor over its title in selling or disposing of the land. It was not, in substance or legal effect, an investment of the proceeds of a sale. It was a releasing of the liability or obligation of Waggoner and Halsell, but, as it came within the power of sale expressly given by section 6 of article 7, it could not be held to be prohibited by section 55 of article 3 of the Constitution, since those provisions must stand and operate side by side.

But while the...