Hampshire v. Greeves

• Citation: 130 S.W. 665
• Parties: HAMPSHIRE v. GREEVES et al.
• Decision Date: 31 May 1910
• Court: Court of Appeals of Texas

130 S.W. 665

HAMPSHIRE v. GREEVES et al.

Court of Civil Appeals of Texas.

May 31, 1910.

On Motion for Rehearing, June 30, 1910.

Appeal from District Court, Jefferson County; W. H. Pope, Judge.

Suit to foreclose a mortgage by L. Hampshire against W. B. Greeves and Ras Landry. From a judgment for Ras Landry, complainant appeals. Affirmed.

Crook, Lord & Lawhon, for appellant. Robt. A. John, for appellee Ras Landry. Smith, Crawford & Sonfield and D. W. Glasscock, for appellees Beaumont National Bank and J. L. Cunningham.

REESE, J.

This is a suit by L. Hampshire against W. B. Greeves to recover the amount due upon two certain promissory notes executed by Greeves to him for $1,000 each and to foreclose a deed of trust lien given by Greeves on lot 409, block 57, in the city of Beaumont, to secure the payment of the notes. The notes and deed of trust were executed March 28, 1903. The deed of trust was filed for record May 3, 1904. Ras Landry was made a defendant under allegations that he claims some kind of a lien on the property, which was alleged to be subordinate to plaintiff's lien, and also that said Landry claimed the title to said property, through or under a written conveyance from the Beaumont National Bank executed subsequent to plaintiff's mortgage; that the bank's claim of title rested upon an instrument of writing purporting to have been executed by Greeves subsequent to the date of plaintiff's mortgage; that Landry's title was subject to plaintiff's lien, and he was made a party "to prevent a multiplicity of suits and to cut off the equity, if any, claimed by him." Plaintiff prayed for judgment for his debt and foreclosure against both defendants. Greeves answered by general denial. Upon trial judgment was rendered against him, from which he does not appeal.

Landry answered by general denial and specially that on June 11, 1901, the title to said lot was in Stephen Geraci, who on that date executed to Ras Landry as trustee a deed of trust to the property to secure the payment of two notes to J. W. Stokes, for $1,000, due June 11, 1902, and $1,065, due June 11, 1904, respectively; that on June 18, 1901, said Stokes transferred said notes and lien to A. E. Broussard, who on or about August 1, 1905, transferred the same to the Beaumont National Bank; that thereafter said bank, joined therein by Broussard, requested Landry to sell said property under said deed of trust, and on September 5, 1905, he sold the property as required by the terms of the deed of trust to said bank, and on September 6th executed to it a deed conveying the title of said Geraci; and that the title so conveyed was superior to the plaintiff's lien. It was further pleaded by Landry that Greeves had, on April 29, 1902, purchased the property from Stephen Geraci subject to the Stokes lien, assuming payment of the Stokes notes, and that he, in December, 1903, executed to Walter J. Crawford, trustee, a deed of trust on the property to secure two notes to the Beaumont National Bank for $1,000 and $1,070, respectively, such deed of trust being given prior to the filing for record of the plaintiff's deed of trust of which the bank had no notice; that thereafter on September 5, 1905, said Crawford, trustee, sold the property in controversy at public sale, under the terms and provisions of the trust deed, to said Beaumont National Bank and executed a deed to them on the same date. It was further alleged that on September 7, 1905, defendant Landry purchased the property from the bank, joined by J. L. Cunningham, who had acquired an interest therein, for the sum of $3,500, and received a general warranty deed from them, and became thereby, as were his grantors, an innocent purchaser thereof without knowledge or notice of plaintiff's said lien. Upon this title Landry prayed judgment removing the cloud upon his title by reason of plaintiff's lien and quieting him his title and possession. Landry further prayed that the Beaumont National Bank and J. L. Cunningham be made defendants, as warrantors of his title, and prayed judgment over against them, in the event of an adverse judgment against him in favor of plaintiff.

The Beaumont National Bank and Cunningham answered defending their title under the two trustees' sales and deeds, as regular in all respects, and pleaded that the bank was an innocent purchaser and lienholder, setting up substantially the same facts pleaded by Landry.

By supplemental petition plaintiff challenged, by special exceptions, the sufficiency of the matters set up in the answers referred to, and specially that the title set up as coming through the Stokes deed of trust was wholly foreign to any issue in the case, and that such matters could not properly be litigated in this suit. It was further alleged in his supplemental petition by plaintiff that the deed of trust executed by Greeves to Crawford, to secure the notes to the bank, was taken with full notice by the bank of plaintiff's prior deed of trust; that on or about November 29, 1904, Greeves executed to J. L. Cunningham, who was acting for the bank and not for himself, a warranty deed whereby he conveyed to Cunningham the property in controversy, together with other real estate set out in the plea, in full satisfaction and payment of all indebtedness claimed against Greeves, and as a part of the consideration of said deed the bank agreed to assume and pay off and discharge the debt of plaintiff herein sued on, and the Stokes notes. It was further alleged that, at the date of the sale by Landry as trustee under the Stokes deed of trust, the said bank owned no interest in the Stokes debt; but that the same was held and owned by A. E. Broussard, and that the sale by Landry as trustee was made without the knowledge, consent, or request of said Broussard and was without authority; that Greeves made no default in any of the terms of either of the two deeds of trust, and the sales thereunder were both void. The plaintiff invoked a marshaling of assets under the plea that the bank had a lien upon other property amply sufficient to satisfy its debts and that it be subrogated to the lien of the bank thereon, and in the event it be held that the defendants had acquired any lien superior to that here set up by plaintiff he offers to pay the amount due defendants, or either of them, and prays that he be subrogated to their rights under such lien.

The case went to trial with a jury, and, after hearing the evidence upon the various issues presented, the court instructed a verdict for the defendants, upon which judgment was rendered, from which plaintiff prosecutes this appeal.

By his first, second, and third assignments of error appellant presents the question raised by his special exceptions to the answers of the appellees, by which they assert, as a defense to the action, the title acquired under the deed of trust executed by Stephen Geraci to Landry, trustee, to secure the Stokes notes, on the ground that it is independent of, and wholly foreign to, the mortgage lien herein asserted by appellant, and there is no privity of estate or contract that would make such lien or the title acquired thereunder a proper subject of litigation in this suit. Under these assignments, appellant states the general proposition that "no title adverse to the contract being enforced can be litigated, and the holder of such adverse title is an unnecessary and improper party," citing, in support of the proposition, Faubion v. Rogers, 66 Tex. 472, 1 S. W. 166, Hinzie v. Kempner, 82 Tex. 617, 18 S. W. 659, and Walraven v. Bank, 53 S. W. 1028.

The rule to be deduced from these cases, and which is well settled, is that, in a suit to foreclose a lien, a subsequent purchaser or lienholder who is made a defendant for the sole purpose of obtaining foreclosure against him cannot bring into the litigation and have adjudicated a title acquired by him adverse to that upon which rests the plaintiff's lien and his own subsequent incumbrance sought to be foreclosed by the judgment. The facts in Faubion v. Rogers were that one Thompson had executed to Perkins & Phillips his bond for title for 1,063 acres of land conditioned to make title on payment of their notes. Perkins & Phillips executed to Faubion their bond for title to 263 acres of the land. Rogers, claiming to be the owner, sold to Faubion 245 acres out of the 263 acres, which Faubion had bought of Perkins & Phillips; Rogers' title being adverse to that claimed by Thompson and conveyed to Perkins & Phillips and by them to Faubion. Thompson sued Perkins & Phillips on their notes and joined Faubion as a subsequent purchaser from them for the purpose of having foreclosure against him also. Thompson had judgment with foreclosure on the entire 1,063 acres. Subsequently Faubion instituted this suit against Rogers on his warranty alleging, it is to be assumed, although it is not so stated in the opinion, or statement of the case, his eviction under this foreclosure. It was held that the title of Rogers could not be litigated in the former suit. We are of the opinion that the facts of this case distinguish it from the case referred to and the others cited. It was alleged and shown that, after executing the notes and deed of trust to Stokes, Geraci sold and conveyed the property in controversy to Greeves, who as part of the consideration assumed the payment of the Stokes notes. Subsequently Greeves executed the deed of trust sued on by appellant, who took such interest as was conveyed, subject to the lien of the Stokes deed of trust, for the discharge of which the mortgagor Greeves was bound, and which had become, in fact, his debt. The title asserted under the foreclosure of the Stokes deed of trust given by Geraci cannot be said to be an independent adverse title to that of Greeves conveyed as a security for appellant's debt here sought to be enforced, as in the cases cited. The Geraci title is not disputed by any of the parties. It became at least a...