Hexter v. Pratt

• Decision Date: 21 November 1928
• Docket Number: (No. 901-4654.)
• Citation: 10 S.W.2d 692
• Parties: HEXTER et al. v. PRATT et al.
• Court: Texas Supreme Court

10 S.W.2d 692

HEXTER et al. v. PRATT et al.

(No. 901-4654.)

Commission of Appeals of Texas, Section B.

November 21, 1928.

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

Suit to foreclose trust deed by J. K. Hexter and another against Mrs. Tennie L. Pratt and Clarence E. Pratt. Judgment for defendants

was affirmed by the Court of Civil Appeals (283 S. W. 653), and plaintiffs bring error. Affirmed.

Superseding opinion in 290 S. W. 734.

Hexter, Rice & Hexter and Etheridge, McCormick & Bromberg, of Dallas, for plaintiffs in error.

J. J. Eckford and C. C. Westerfield, both of Dallas, and W. F. Robertson and Charles L. Black, both of Austin, for defendants in error.

SPEER, J.

This suit involves the right of plaintiffs in error to foreclose a deed of trust executed by defendant in error Mrs. Tennie L. Pratt upon the land in controversy, in which suit defendant in error Clarence E. Pratt pleaded that he was the equitable owner of the property; that Mrs. Tennie L. Pratt, his mother, had purchased the same with funds belonging to him; and that the plaintiffs in the case had acquired their mortgage lien with notice of his claim. The notice was alleged to be both constructive (through a certain lis pendens) and actual. The issue of innocent holder was duly pleaded by the plaintiffs. The trial court to which the cause was submitted found that the plaintiff Hexter had actual notice of the claim of title of defendant Clarence E. Pratt to the property before and at the time the note and deed of trust were executed. The court refused the foreclosure sought and rendered judgment for the property in favor of C. E. Pratt against Mrs. Tennie L. Pratt. The plaintiffs appealed, and the Court of Civil Appeals affirmed the judgment of the trial court. 283 S. W. 653.

Writ of error was granted, and the cause was referred to Section A of the Commission of Appeals, who recommended that the judgment of the Court of Civil Appeals be reversed and that of the district court reformed so as to award a foreclosure, and as thus reformed that it should be affirmed. This recommendation was adopted, and judgment was accordingly entered. 290 S. W. 734. Upon motion for rehearing the Supreme Court withdrew the case from the Commission for a further consideration.

In our opinion it is unnecessary to discuss any question other than that of actual notice to plaintiffs in error, the ground upon which the trial court refused the foreclosure. The question of actual notice arose in this way: The property in controversy by proper deeds of conveyance stood in the name of Mrs. Tennie L. Pratt. She sought a loan from plaintiffs in error, and in the negotiation of the loan she placed in their hands an abstract of title containing a copy of a lis pendens filed in certain cases afterward consolidated, wherein defendant in error Clarence E. Pratt claimed the property in controversy as against his mother and sought judgment for its title and possession. The abstract further contained an order dismissing the consolidated cause for want of prosecution. The order of dismissal referred to was of date July 28, 1919, and the note and mortgage executed by Mrs. Pratt were dated November 19, 1919.

Plaintiff in error Hexter, to whom the abstracts of title were delivered, placed them in the hands of his attorney, who examined them and reported the result of his examination in writing. The attorney was advised of the contents of the abstract, including the court proceedings between the Pratts as herein shown. No effort was made by the attorney nor by the plaintiffs in error to inquire into the facts constituting the claim of C. E. Pratt, but, relying upon the sufficiency of the order of dismissal to terminate the effect of the lis pendens as notice, and assuming that the facts shown did not constitute actual notice, no inquiry was made and the transaction of the loan was closed.

We are of the opinion that the plaintiff in error Hexter is not an innocent purchaser for value; that he had notice of such facts as by the use of reasonable diligence he could have ascertained the extent of the claim and right of defendant in error C. E. Pratt.

Notice in law is of two kinds — actual and constructive. These descriptive terms need but little explanation. In common parlance "actual notice" generally consists in express information of a fact, but in law the term is more comprehensive. In law whatever fairly puts a person on inquiry is sufficient notice, where the means of knowledge are at hand, which if pursued by the proper inquiry the full truth might have been ascertained. Means of knowledge with the duty of using them are in equity equivalent to knowledge itself. Where there is a duty of finding out and knowing, negligent ignorance has the same effect in law as actual knowledge. So that, in legal parlance, actual knowledge embraces those things of which the one sought to be charged has express information, and likewise those things which a reasonably diligent inquiry and exercise of the means of information at hand would have disclosed. Actual notice is always a question of fact. 20 R. C. L. p. 340.

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