Douglass v. Blount

• Decision Date: 07 April 1902
• Citation: Douglass v. Blount, 67 S.W. 484 (Tex. 1902)
• Parties: DOUGLASS v. BLOUNT et al.
• Court: Texas Supreme Court

67 S.W. 484

DOUGLASS v. BLOUNT et al.

Supreme Court of Texas.

April 7, 1902.

Error to court of civil appeals of First supreme judicial district.

Suit by E. A. Blount against Isaac Watson and others. From a judgment of the court of civil appeals (62 S. W. 429) affirming a judgment in favor of plaintiff, defendant W. L. Douglass brings error. Reversed.

J. N. Votaw and J. D. Martin, for plaintiff in error. Geo. C. Greer and Bullitt & Louis, for defendants in error.

BROWN, J.

W. M. Fortescue conveyed to Isaac Watson a half league of land for $3,321, of which one-third was paid in cash, and for the remainder two notes for $881 each, payable in one and two years, and one note for $452, payable in three years, were executed by Watson. The deed executed by Fortescue reserved a lien to secure payment of the notes. Fortescue at once assigned the third note to W. S. Swilley, who, with one Cameron, afterwards indorsed it to the Reliance Lumber Company. That company brought suit upon the note against Watson as maker and Swilley and Cameron as indorsers, and sought also a foreclosure of the lien upon the land; failing, however, to make Fortescue a party. A judgment was recovered in that suit against all of the defendants and foreclosing the lien as sought. Order of sale was issued upon it, and the land was sold thereunder, and W. L. Douglass became the purchaser for the sum of $50. Thereafter Swilley prosecuted a writ of error from the judgment, and it was reversed, because he had not been properly served, and the cause, as to him, was remanded for further proceedings, but the judgment as against the other defendants and the foreclosure was not disturbed. The cause as to Swilley has never been disposed of, but after the reversal he settled with the plaintiff therein, and secured from it an assignment of all its rights in the judgment and the note on which it was founded. Prior to the recovery of the judgment referred to by the Reliance Lumber Company, Fortescue had brought suit in Nebraska against Watson, seeking personal judgment alone against him upon the two first notes. Watson defended on the ground that the purchase of the land was in fact made by and for one Emory A. Cobb, and that the deed was made to and the notes executed by him (Watson) as the depositary of the title for Cobb, and that the agreement of all parties was that Watson was not to become personally bound upon the notes. Upon this defense judgment was rendered in his favor. There were no parties to this proceeding except Fortescue and Watson. Thereafter, and subsequent to all of the transactions before stated, except the assignment from the Reliance Lumber Company to Swilley, Fortescue indorsed and assigned to E. A. Blount the two notes originally retained by him, and also executed to Blount a conveyance of all his (Fortescue's) title to the land for which the notes were given. The present action was brought by Blount December 10, 1898, against Watson, Cobb, Douglass, Swilley, and others. In the amended pleading on which the last trial was had he stated the history of the transactions, and offered to release all claim upon the land if the defendant entitled thereto would pay the notes held by him; alleged that he had tendered to Douglass the amount paid by the latter at the sheriff's sale, and that he had deposited in court a sum sufficient to pay off the Swilley judgment, which he tendered to defendants, and that Douglass had asserted against one of the notes the defense of limitation. He prayed: First, that he be allowed to recover the land; or, if that relief should be denied, second, for judgment against Watson for the amount of his two notes, and a foreclosure of his lien, and sale of the land, and the application of the proceeds to his claim, or proportionally to such claim and to the $452 note; or, if this should be denied, for a proportionate division of the land between him and the defendants. Watson and Cobb made no defense. Douglass pleaded limitation against one of the notes sued on, set up his title under the facts stated, and pleaded the Nebraska judgment in favor of Watson in bar of any recovery on the notes. He denied plaintiff's right to rescind the original sale of the land and to recover it, but did not offer to pay the notes sued on. Swilley, in addition to pleading the facts upon which his rights under the $452 note and the judgment thereon depend, attacked the sheriff's sale to Douglass, and sought to have it set aside on the ground that Douglass was the attorney for the Reliance Lumber Company in that proceeding, and that the sale was made irregularly, and for a grossly inadequate price. The judgment of the district court, which was affirmed by the court of civil appeals (62 S. W. 429), set aside the sale to Douglass, requiring the return to him of the amount of his bid and interest; ordered the money paid in by plaintiff to pay the balance of the judgment on the $452 note to be paid to Swilley, and adjudged the land to Blount. The court of civil appeals stated meagerly the facts bearing upon Douglass' purchase, but the testimony is undisputed, and proves that Douglass & Jackson, a firm of attorneys, represented the Reliance Lumber Company in procuring the judgment under which the land was sold; and after the land had been advertised for sale Douglass informed the Reliance Lumber Company of the fact that the land would be sold, and the time and place, advising his client to purchase the land; but the lumber company declined to do so, and instructed Douglass not to buy the land for it. He then stated to the officers of the company that he would buy it for himself, to which they assented. Swilley was defendant in the execution, and liable for the amount which might remain unpaid after the subjection of the land, and Douglass informed him on the day before the sale that it would occur, stating that Douglass intended to buy the land, as his clients declined to do so. Douglass invited Swilley to join him in the purchase of the land, which the latter declined to do. On the day of the sale Swilley was present, and did not bid upon the land, nor offer any objection to the sale being made at that time. As to the value of the land, Swilley testified that he was afraid to bid upon it on account of the condition of the title, but that the land was worth on the day of sale about $2 per acre, sold in the usual manner of part cash and the balance on time. He states that at the time there was outstanding incumbrance of $2,000, besides the notes held by Blount and the amount of the judgment. Swilley says, with reference to the sale and the reason why there were no other bidders, "I think every one else felt about it as I did as to the land and its value at the time of the sale."

The court of civil appeals disposed of the sale to Douglass in very few words, but we gather from the opinion that the judgment of the trial court was affirmed because Douglass was attorney for plaintiff in the writ, holding that a purchase by an attorney with the consent of his client is void in favor of the defendant in the execution. We assume, then, that the court sustained the judgment of the district court setting aside the sale to Douglass upon the contention presented by the attorneys for Swilley, based upon McLaury v. Miller, 64 Tex. 384. That case rests mainly upon Howell v. Baker, 4 Johns. Ch. 118, in which Chancellor Kent wrote in terms severely condemning the practice of an attorney buying property exposed to sale under process controlled by him. That eminent chancellor quoted from Hall v. Hallet, 1 Cox, Ch. 134, this language: "No attorney can be permitted to buy in things in a course of litigation, of which litigation he has the management. This the policy of justice will not endure." The chancellor then continued the opinion in the following language: "But, though the rule disqualifying trustees, and particularly solicitors and attorneys, from purchasing at sales brought about through their agency, has strong pretensions to be applied to this very case, I do not perceive it to be incumbent upon me, at present, to decide that point. The purchase by the defendant B. was made under special circumstances, which are sufficient of themselves (and particularly when taken in connection with his character as attorney to the execution) to constitute him a trustee for the parties, whose interests were concerned in the sale." The following comment upon that opinion by Chief Justice Walworth states forcibly the fallacies in Chancellor Kent's dicta: "I consider the fact that the purchase was made by the attorney, without the consent and against the interest of some of his clients, or those for whose benefit he is supposed to act as attorney, as important in this case; for, notwithstanding the court in Howell v. Baker, 4 Johns. Ch. 121, said that the rule disqualifying solicitors and attorneys from purchasing at sales brought about by their agency had strong pretensions to be applied to the case of an application by the defendant in an execution to set aside a purchase made by the plaintiff's attorney, the late chancellor intentionally avoided deciding that point, though it was directly before him in that suit. I think the doctrine has never been carried to that extent, even in the decisions of the English courts, which have gone the farthest on this subject. The reasons why the attorney or agent is not permitted to purchase are because it is supposed to be inconsistent with the duty which he owes to those for whom he is employed to act, and from the relation which exists between the agent and his principal, or between the attorney and his client. But these reasons cannot apply to the defendant in the execution. The plaintiff's attorney owes no allegiance to the defendant, and is under no obligation of duty to take care of his interest; neither is there any confidential connection existing between them. There can be no doubt of the right of a plaintiff to...