Francis M. Wethered's Adm'r v. Boon

• Decision Date: 01 January 1856
• Citation: 17 Tex. 143
• Parties: FRANCIS M. WETHERED'S ADMINISTRATOR v. HANNAH BOON.
• Court: Texas Supreme Court

17 Tex. 143

FRANCIS M. WETHERED'S ADMINISTRATOR

v.HANNAH BOON.

Supreme Court of Texas.

1856.

Where an agent, in violation of the instructions of his principal, procures a headright certificate to be issued to himself as assignee instead of to his principal, he holds the title in trust for the principal; but as to third persons who are not proved to have had notice of the contract or of the interest of the beneficiary, and who purchase for value, the agent will be regarded as the true owner of the certificate.

If the purchaser from such agent is affected with notice he is a trustee of the legal estate for the benefit of the principal to the extent of the interest of the latter.

The acknowledged doctrine in the case of an alienation by a trustee of the trust property contrary to the trust is, that with notice actual or constructive, the trust is attached to the property and the alienee becomes, ipso facto, a trustee. But the bona fide purchaser from the holder of the legal title, without notice, will be protected.

Notice is either actual or constructive. The former is where the party to be affected is proved to have had actual knowledge of the fact. The latter is where the party by any circumstance whatever, is put upon inquiry, which amounts in judgment of law to notice, provided the inquiry becomes a duty, as in the case of purchasers and creditors, and would lead to the knowledge of the requisite fact by the exercise of ordinary diligence and understanding. [23 Tex. 443;25 Tex. 54;29 Tex. 216.]

In a great variety of cases, it must be matter of doubt and difficulty to decide what circumstances are sufficient to put a party upon inquiry, and each case must depend upon its own circumstances. But is clearly settled that vague and indeterminate rumor or suspicion is quite too loose and inconvenient in practice to be admitted to be sufficient.

Where the testimony was that the purchaser of a headright certificate, from an assignee, before making the purchase, came to the witness, who knew facts enough to render it probable that said certificate had been obtained under a contract by the assignee to locate it and perfect the title for one-half, and inquired of witness whether the assignee's right to said certificate was good or not, and witness feeling doubtful from what he knew, advised him to search the records of the district court, and went with him to do so, and they searched the records, where there was a judgment on appeal from the board of land commissioners, establishing the right of the assignee to the certificate, it was held that the purchaser was not bound to look further, and was not affected with constructive notice of the rights of the original owner of the headright.

Appeal from Shelby. Tried below before the Hon. Archibald W. O. Hicks.

Suit commenced January 19, 1848, by the appellee against appellant to recover one-half of a league of land. The league was patented to the defendant as assignee of the plaintiff. There was evidence conducing to prove that the plaintiff had authorized one Harrison E. Watson to obtain her certificate in his own name as her assignee; and that the agreement was that he should locate it and perfect the title and then reconvey the plaintiff one-half. The application for a certificate by Watson as assignee was refused by the board of land commissioners of San Augustine county in February, 1838; he then applied to the district court; his application was sustained and on the first day of May, same year, the certificate was issued to him. On the 14th of the same month Watson conveyed the certificate to the defendant's intestate, stating the consideration to be three hundred and sixty dollars.

The evidence relating to notice was as follows: Wethered lived at Milam, about twenty miles from San Augustine, and the plaintiff lived within two or three miles of San Augustine and about a mile from the road leading to Milam. E. O. Le Grand, a witness for plaintiff, testified that he had known Hannah Boon and Harrison E. Watson ever since 1834, and F. M. Wethered ever since the winter of 1837 and 1838; that he knew something of a contract being made between Hannah Boon and defendant Watson concerning her headright certificate; that witness and H. E. Watson sometime in February, 1838, applied to the San Augustine county board of land commissioners; he, Watson, to prove up plaintiff's headright in the name of Hannah Boon, and witness to prove it up in the name of Hannah Chumney (her father's name was Chumney), both relying on the contract previously made with said Hannah; that before Wethered claimed to have purchased said certificate, witness had heard Watson speak of making a contract with Hannah Boon concerning her headright; that on the same day Watson and witness applied to the San Augustine board of land commissioners to prove up plaintiff's headright, Watson said that he had contracted to prove it out for plaintiff, for which he was to get one-half by locating, surveying and getting out the patent at his own expense, and proposed to witness that if witness would not appeal from the decision of said land board to the district court, he would take said appeal in the name of Hannah Boon, and make witness an equal partner in his contract with plaintiff; that before said Wethered claimed to have purchased said certificate, he came to witness to inquire whether Watson's right to said certificate was good or not, and witness feeling doubtful from what had previously transpired between Watson and witness, he, witness, advised Wethered to search the district court records, and witness went with him to do so, and after having searched the records, Wethered purchased it. Witness does not recollect what was said at the time.

One witness for plaintiff testified that in the spring of 1838 good headrights in San Augustine rated at from six hundred to one thousand dollars per league; but he knew of their selling as low as three hundred and fifty, and even lower; it depended upon the men who had them, and their wants. Another witness for plaintiff testified that at that time in San Augustine good headrights rated, upon an average, at about five hundred dollars; that wet headrights coming out by the peck reduced the price and impaired the sale of the good ones; witness had known them to sell for less than three hundred and sixty dollars; about that time any amount of bad ones could have been bought for $100 each.

A witness for the defendant, who drew the papers for the sale from Watson to Wethered, stated that he recollected that Wethered paid Watson money for the said headright, the exact amount witness did not recollect; recollected seeing the money pass between them; Watson and Wethered were engaged about a day in making the trade. A witness for defendant testified that he had known, in the spring of 1838, certificates that were said to be good, to be sold for less than three hundred and sixty dollars; he was offered for his headright $800 in goods.

Testimony not going to the fact of notice is omitted.

O. M. Roberts, for appellant.

Henderson & Jones, for appellee.

WHEELER, J.

It is admitted by the plaintiff that Watson had authority to procure from the board of land commissioners the issuance of her certificate, and perfect title to the land. If, as she alleges, by the contract he was to obtain the certificate in her name, and was not authorized to procure it to be issued in his own name and right, and the title in part remained in her, he, upon obtaining the certificate in his own name, became her trustee to the extent of her own interest, clothed with the legal title in trust for her. The case is not materially different in principle from that of one who employs an attorney to purchase lands for him with his money and in his name; but who, contrary to the instructions of his principal, takes the title in his own name. He holds the title in trust for his principal, who may assert his right and require...