Johnson v. Darr

• Citation: 272 S.W. 1098
• Decision Date: 24 May 1925
• Docket Number: (No. 4300.)
• Parties: JOHNSON et al. v. DARR et al.
• Court: Supreme Court of Texas

Page 1098

272 S.W. 1098

JOHNSON et al. v. DARR et al.

(No. 4300.)

Special Supreme Court of Texas.

May 24, 1925.^*

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

Action by J. M. Darr and others, as trustees for the Woodmen of the World, against W. T. Johnson and others. Judgment granting plaintiffs only partial relief was reversed by Court of Civil Appeals (257 S. W. 682), and judgment rendered granting plaintiffs full relief, and defendants bring error. Affirmed.

Armstrong & Morrow, of El Paso, for plaintiffs in error.

Goggin, Hunter & Brown, of El Paso, for defendants in error.

WARD, Special Chief Justice.

This is an action instituted by J. M. Darr and others as trustees for the fraternal beneficiary organization known as Woodmen of the World against W. T. Johnson and others to establish a trust, remove cloud, and enjoin sale under attachment lien and judgment of foreclosure involving two tracts of land in the city of El Paso. The cause was tried upon an agreed statement of facts, and judgment was entered in the trial court in favor of plaintiffs for one of the tracts involved, and for the defendants for the other. On appeal the honorable Court of Civil Appeals at El Paso reversed the case and rendered judgment for appellants Woodmen of the World, for both tracts; Justice Higgins dissenting.

The agreed statement of facts is fully set out in the opinion of that court. 257 S. W. 682. The facts in substance are that the trustees of the Woodmen of the World, for a nominal consideration, on August 24, 1921, conveyed the title to the two tracts of land involved in the suit to F. P. Jones. On the same date Jones executed an agreement to hold it in trust for them and to reconvey when called upon to do so. The agreement to hold in trust and reconvey was evidenced in writing, as follows:

"The State of Texas, County of El Paso.

"Whereas, Tornillo Camp, No. 42, Woodmen of the World * * * in regular session ordered the managers as auditors and trustees * * * to sell, transfer and convey to the undersigned, the following real estate [then follows description]; and, whereas, said officers have executed and delivered said deed, thereby transferring and conveying said property to the undersigned; this is to acknowledge that I have received said conveyance in trust and agree to reconvey the same to such person as said officers shall direct, at any time they may request said conveyance. Dated, signed and acknowledged August 24th, 1921. Filed for record October 24th, 1922."

The deed to Jones was recorded, but the agreement of Jones was not recorded until October, 1922. Meanwhile, creditors of Jones levied an attachment upon the property in June, 1922, and in December, 1922, obtained judgment for their debt and foreclosure of attachment lien. Shortly after the levy of attachment lien this suit was filed by Darr et al., trustees for Woodmen of the World.

Plaintiffs in error contend that the declaration of trust executed by Jones is such an instrument as must be recorded to protect the equitable title of defendants in error against attaching creditors. Article 6824 is as follows:

"* * * All bargains, sales and other conveyances whatever, of any land, tenements and hereditaments, whether they may be made for passing any estate of freehold of inheritance, or for a term of years; * * * shall be void as to all creditors and subsequent purchasers for valuable consideration without notice, unless they shall be acknowledged or proved and filed with the clerk, to be recorded as required by law."

Defendants in error insist that said instrument, though entitled to record under article 6823, is not within the scope of article 6824, and therefore their equitable title was superior to the attachment lien.

If defendants in error are correct in their contention, no necessity exists to consider any other questions raised by the assignments. Thus the first question presented is whether or not the instrument above set out falls within the purview of article 6824, requiring certain instruments to be recorded.

When a right is solely and exclusively of legislative creation, and does not derive existence from the common law or principles of equity, and creates a new right by statute, the courts will not extend the application of the statute, but will limit its application to the exact words of the act. "He who would avail himself of such a summary remedy must bring himself within both the letter and spirit of the law." Sutherland on Statutory Construction (2d Ed.) § 572.

The terms of article 6824 should doubtless be construed for the suppression of the mischief it was designed to prevent, and all conveyances within its spirit and scope should be brought under its operation. To go further would be for the courts to assume legislative functions and transcend the authority of a judicial tribunal. The instrument under consideration created a trust in lands, and under no rational rule of construction can it be regarded as a conveyance or passing of an estate in land. It is merely the written acknowledgment of a trust created by the agreement of the parties when the deed was executed, placing the naked legal title in Jones and retaining the equitable title in the trustees of the Woodmen of the World. The deed being absolute on its face but in fact passing only the naked legal title to Jones, are the lands so conveyed subject to the creditors' attachment lien?

It will not be questioned that, had the trustees been less diligent in attempting to protect the interest of their organization and left the proof of the trust to parol evidence, no interest in the land would have been acquired by the attachment lien, as against the equitable title remaining in the Woodmen of the World, and, if proof of the trust had been left to parol, the attaching creditors would have acquired no more interest in the land than Jones had. Grace v. Wade, 45 Tex. 522; Parker v. Coop, 60 Tex. 111; McKamey et al. v. Thorp et al., 61 Tex. 648; Blankenship v. Douglas, 26 Tex. 227, 82 Am. Dec. 608; Oberthier v. Stroud, 33 Tex. 522; Senter & Co. v. Lambeth, 59 Tex. 259; Henderson v. Rushing, 47 Tex. Civ. App. 485, 105 S. W. 840; First State Bank of Amarillo v. Jones, 107 Tex. 623, 183 S. W. 874.

It is the settled law in this state that attachment lien creditors acquire no greater interest in the land than that owned by the debtor, at the date of the levy, except where such common-law rule has been abrogated by the registration laws expressly defining the effect of unrecorded conveyances and mortgages against purchasers and creditors without notice.

But plaintiffs in error contend that, because the instrument was entitled to record, it must be recorded to protect the equitable title remaining in defendants in error. That instruments permitted to be recorded are not required to be recorded in order to protect the equitable title against attaching creditors is held in Adams v. Williams, 112 Tex. 469, 477, 248 S. W. 676; the opinion by the Commission of Appeals saying:

"There having been, under the facts certified, a valid assignment of the two vendor's lien notes in controversy to Mrs. Cooper, the lien securing the same and the right to enforce such lien by foreclosure upon the land, and the sale thereof, if necessary, passed to her with the debt evidenced by said notes. * * * Article 6824 of our registration statutes (Vernon's Sayles' Ann. Civ. St. 1914) has no application to the assignment of promissory notes as such."

In Traders' Nat. Bank v. Price (Tex. Com. App.) 228 S. W. 160, the Commission of Appeals held:

"An affirmative declaration, or an act equivalent to such declaration, by the record owner of the note that same had been paid, satisfied, or canceled, or the lien released or extinguished, would protect one dealing with the land in good faith for a valuable consideration and without notice; but, in the absence of such affirmative declaration or equivalent act by the record owner, the fact that the transfer of the note and lien was not of record would be without effect upon the rights of the respective parties. * * * Henderson v. Pilgrim, 22 Tex. 464, and Moran v. Wheeler, 87 Tex. 179. * * * Whether the above-quoted article [6824] requires the recording of every instrument conveying any interest in land, or only such as are `made for the passing of any estate of freehold, of inheritance, or for a term of years,' and whether the assignment of a vendor's note and lien conveys an estate or interest within the purview of the article, need not, in our view of the case, be determined. * * *"

In the case of Shear Co. v. Currie (C. C. A.) 295 F. 841, the Circuit Court of Appeals held a vendor's lien valid as between the debtor and creditor, though an assignment of the same was unrecorded and the lien had been erroneously released of record, is superior to a subsequent attachment lien. The court says:

"At common law, apart from the effect of registration statutes, the lien of a creditor, obtained through the institution of legal proceedings, is confined to the interest of the debtor in the property at the time of the levy of the process, and this is the rule in Texas. The rule in Texas in cases of attachment liens has been held to be different by reason of its registration statutes from the common-law rule. * * * Paris Grocer Company v. Burks, 101 Tex. 106, 105 S. W. 174. * * * In that case, an unrecorded deed was postponed to an attachment lien, not upon the ground that credit had been extended to the apparent owner on the faith of the record, which estopped the holder of the unrecorded deed, but because the statute declared the unrecorded deed to be void as to creditors, regardless of any estoppel. This principle was later recognized in Parks v. Worthington, 101 Tex. 505, 109 S. W. 909. In the case of First State Bank v. Jones, 107 Tex. 623, 183 S. W. 874, the same court held that a judgment lien creditor did not stand in the same position...