Franco-Texan Land Co. v. McCormick
| Decision Date | 11 October 1892 |
| Citation | 23 S.W. 118 |
| Parties | FRANCO-TEXAN LAND CO. v. McCORMICK et al. |
| Court | Texas Court of Appeals |
Trespass to try title by Thomas McCormick against the Franco-Texan Land Company and others. From a judgment against the land company, it brings error. Affirmed.
The other facts fully appear in the following statement by HEAD, J.:
The Franco-Texan Land Company is a corporation organized under the general laws of the state of Texas; the purpose of its organization being, as stated in its charter, "the acquisition, by purchase or otherwise, and the location and subdivision, of lands; the management and leasing thereof, and the sale and conveyance of the same in lots and subdivisions, or otherwise; the division of the net proceeds of said lands, when sold, among the holders of the capital stock of said company; and the promotion of emigration." The record does not show whether or not there are any stipulations in the charter as to the officers or agents of the corporation that are to have control of the sale of said lands, or the terms upon which sales shall be made, but it is shown by the record that no authority is contained in the charter, authorizing the president or other officers to sell its lands for other consideration than money, or to waive the vendor's lien for unpaid purchase money. The by-laws of said corporation, in force in 1885, provided, among other things, that the lands of said company might be sold or leased for cash, or on a credit, but no authority was contained therein, authorizing the president or other officer to sell lands of said company for other consideration than money, or to waive the vendor's lien for unpaid purchase money. Sales of the land belonging to the corporation, prior to 1885, had usually been made by the president, and the vendor's lien had uniformly been retained, to secure the deferred payments, when credit was given. It was also the general custom, in that section of the country where this transaction was had, to reserve the vendor's lien, to secure deferred payments, when land was sold on a credit. The authority of the president to make these sales was derived from the powers given him by law to execute deeds in behalf of the corporation, as such officer; from the clause of the by-laws above set forth; and from such powers as might be implied from the course of dealing and general custom above indicated. On the 20th day of February, 1885, R. W. Duke, who was then president of the Franco-Texan Land Company, executed and delivered to W. G. Martin a deed conveying 26 sections of land belonging to said company, among which was section 3, block 18, in Taylor county, Tex., it being the land in controversy in this suit. The consideration recited in said deed is as follows: "Forty-nine thousand nine hundred and twenty dollars ($49,920.00) to be paid by W. G. Martin, of the county of Taylor, and state of Texas, as follows: One note of even date herewith, executed by the said W. G. Martin, for nine hundred and fifty dollars, ($950.00,) due one year after date; also, nine thousand nine hundred and twenty dollars, cash in hand paid, the receipt of which is hereby acknowledged; and the further consideration of a promissory note for forty thousand dollars ($40,000.00,) bearing ten per cent. interest from date, executed by J. H. Milliken, December 15, 1885, to W. G. Martin or bearer, and transferred and delivered by said W. G. Martin to R. W. Duke, president of the Franco-Texan Land Co., on the 18th day of February, 1885, due and payable December the 16th, 1886, the same being in full payment of the balance of the purchase price of the lands heretofore described." No express lien was reserved in said deed to secure the unpaid purchase money. In fact, as a part of the real consideration, in addition to that recited in the deed, said Martin also gave to said Duke, as president of said company, another note, for $1,000. On the same day that said deed was so delivered by Duke to Martin, the said Martin executed and delivered to J. H. Milliken a deed conveying to him an undivided one-half interest in said 26 sections of land. On the 23d day of July, 1885, said J. H. Milliken executed to F. R. Milliken a deed conveying an undivided one-half interest in said land. Thereafter, on the 14th day of September, 1885, the said F. R. Milliken and W. G. Martin executed to Thomas McCormick, defendant in error herein, a general warranty deed, conveying to him all of section No. 3, block No. 18, Texas & Pacific Railroad survey, containing 408½ acres, in consideration of $1,022.50, which was then paid in cash by said McCormick, and he claimed the land in controversy under this claim of title. The $40,000 note mentioned in the deed from Duke to Martin, above, was secured by a deed of trust on a one-half interest in a stock of horses, consisting of about 3,631 head; and it was stipulated in said note that, upon default in the payment thereof at maturity, the principal and interest might be discharged, and be collectible in horses of said stock at the rate of $30 per head. At the time of the execution of said deed from Duke to Martin, it was expressly understood between them that the said Duke accepted said $40,000 note, secured as aforesaid, and released the vendor's lien upon all of said land for all of the consideration except the $950 note. After the purchase of the land in controversy in this suit by said McCormick from Martin and Milliken, said Franco-Texan Land Company filed suit in the district court of Taylor county against said Martin, Milliken, and L. H. Fitzhugh, and, while it was pending, J. B. Simpson also became a party by intervention, as purchaser of Fitzhugh's interest. The object of this suit was to rescind the trade, and cancel the deed from Duke to Martin, and the title of the several defendants claiming thereunder, upon substantially the same grounds as plaintiff in error seeks to have this done in this suit, but, in said suit, McCormick was not made a party. Upon the trial of this case, judgment was rendered in favor of said corporation, canceling said deeds, ordering the $10,000 which had been paid as a cash consideration to be paid to the defendants Martin and Simpson, and canceling the several notes which had been given for the deferred payments, and ordering their return to the defendants Martin and Milliken. At the time that said McCormick purchased the land in controversy, he had only been in this state a few days, and the only notice he had as to the powers of said Duke in making the sale to said Martin was such as he was charged with by law, and by the recitals in the deed from Duke to Martin. On the 21st day of December, 1888, said Thomas McCormick, as plaintiff, filed his petition in trespass to try title in the district court of Taylor county, making the said Franco-Texan Land Company, W. G. Martin, and George Clayton defendants. In this suit, plaintiff seeks to recover from said company the fractional section in controversy, and also, as an alternative remedy, seeks to recover upon a bond for $950 given by said Martin as principal, with said Clayton as security. In answer to this petition the Franco-Texan Land Company pleads over against plaintiff, alleging the invalidity of the deed made by Duke to Martin, by reason of the alleged want of power to make the sale, accepting the note of Milliken secured by a chattel mortgage upon horses, and waiving the vendor's lien upon the land, and also charging, in general terms, fraud and collusion between Duke, Martin, and Milliken, in said trade. In its said answer there is no allegation as to the relative value of the land claimed by plaintiff, McCormick, as compared with the other 25 sections, nor as to the value of any of said lands, nor is there any offer to account to McCormick for any part of the cash consideration and notes received by said corporation in said trade. In its answer said company prays for the rescission of the trade between Duke and Martin, and for the cancellation of the several deeds under which McCormick claims; but, failing in this, it also prays for a foreclosure of what it alleges to be its vendor's lien for the payment of the $950 and $40,000 notes upon the land claimed by McCormick, in the proportion of its number of acres compared with the total number of acres in the 26 sections. As a matter of fact, there was no actual fraud in the transaction between Duke and Martin and Milliken, but the parties thereto acted in good faith in making the trade. Judgment was rendered in favor of defendant in error, for the land, and refusing the alternative prayer of plaintiff in error to foreclose the vendor's lien claimed by it.
G. A. Kirkland, for plaintiff in error. Cockrell & Cockrell, for defendant in error.
HEAD, J., (after stating the facts.)
By reference to the case of Fitzhugh v. Land Co., 81 Tex. 306, 16 S. W. Rep. 1078, it will be seen that some of the most important questions involved in this record have already been settled by our supreme court. That suit was brought to cancel the particular deed from Duke, as president of the Franco-Texan Land Company, to W. G. Martin, involved in this controversy, and, had McCormick been made a party thereto, there would have been no necessity for this litigation. In that case it is very clearly held that the authority given the president of a corporation to execute deeds conveying its land by article 600 of our Revised Statutes does not confer upon such officer the power to make the contracts of which such deeds are the consummation, and that in making such contracts the president must derive his authority from the corporation in the same manner as any other agent; but such authority may be implied from the acts of the directors in recognizing and adopting the agent's transactions, and need not be in writing. In other words, article 600 confers upon the president the power to execute the deed, and the...
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