Livezey v. Putnam Supply Co., 704.

• Decision Date: 16 May 1930
• Docket Number: No. 704.,704.
• Citation: 30 S.W.2d 902
• Parties: LIVEZEY v. PUTNAM SUPPLY CO.
• Court: Texas Court of Appeals

Page 902

30 S.W.2d 902

LIVEZEY v. PUTNAM SUPPLY CO.

No. 704.

Court of Civil Appeals of Texas. Eastland.

May 16, 1930.

Rehearing Denied July 11, 1930.

Appeal from District Court, Shackelford County; M. S. Long, Judge.

Suit by the Putnam Supply Company against J. F. Livezey. Judgment for plaintiff, and defendant appeals.

Affirmed.

F. L. Kuykendall, of Albany, and Eugene Lankford, of Cisco, for appellant.

Butts & Wright, of Cisco, and Giles Harris, of Moran, for appellee.

HICKMAN, C. J.

The appeal is from a judgment in favor of appellee against appellant for the title and possession of personal property, consisting of well-drilling machinery and tools. The nature of the present suit can probably be best understood by a recital of the facts of a former suit, pleaded herein by appellant as res adjudicata of the issues involved. On the 17th day of June, 1927, Allen Buell, Jr., executed to appellant a chattel mortgage upon the property in controversy. This mortgage was signed, "Grider & Buell, by Allen Buell, Jr." Thereafter appellant instituted a suit against A. D. Grider and Allen Buell, Jr., on a note for which the mortgage was executed as security, and for a foreclosure of the mortgage lien.

Grider answered in that suit, admitting in part the indebtedness to appellant, but defending against a foreclosure of the mortgage on the ground that the property covered thereby was not the property of Grider & Buell, but was the individual personal property of Grider alone, in which Buell had no interest.

Issues were joined in that suit as to the authority of Buell to execute the mortgage, and resulted in a judgment in favor of appellant herein, foreclosing the mortgage as to all of the property. No appeal was prosecuted from that judgment.

The record discloses that appellee, Putnam Supply Company, filed a petition in intervention in that cause, declaring upon a mortgage executed to it by Grider. The judgment recites, "and the Putnam Supply Company, intervenor in said cause, having been permitted to withdraw its application to intervene." At the foreclosure sale under the original judgment appellant became the purchaser. Prior to the date of the foreclosure sale appellee had caused the property to be sold under a power contained in a mortgage executed to it by Grider, and became the purchaser at the sale. Appellee's mortgage was dated subsequent to appellant's mortgage, but prior to the judgment foreclosing appellant's mortgage and prior to the institution of the suit for that purpose. The instant suit was filed by appellee to establish its title to the property as against the title of appellant obtained under his foreclosure suit.

Only two issues were answered by the jury upon the trial of the instant case, and upon these answers judgment was rendered for appellee. These issues and the answers thereto were as follows:

"1st. On the 17th day of June, 1927, the date of the defendant Livezey's mortgage, were Arch D. Grider and Allen Buell, Jr., partners, as that term has been defined herein for you? Answer `No.'

"2d. On the 17th day of June, 1927, the date of the defendant Livezey's mortgage, was all or any part of the property in question the property of Arch D. Grider? Answer `Arch D. Grider owned all.'"

Eleven propositions for reversal, based upon thirteen assignments of error, are presented in appellant's brief. We shall not discuss each of these propositions separately, but shall discuss the controlling questions of law presented.

A special exception was sustained to paragraphs 3 to 10, inclusive, of appellant's first amended original answer, and this ruling of the trial court is assigned as error. This answer, among other things, pleaded the mortgage executed by Allen Buell, Jr., to appellant; alleged that Grider & Buell were partners, and, as partners, were indebted to appellant in the sum of $2,206, and to evidence such indebtedness the partnership of Grider & Buell, acting through Buell, executed to appellant a promissory note and the chattel mortgage first above described in this opinion. The court erred in sustaining a demurrer to this pleading. Appellant's claim of title came through this mortgage. A fact issue involved in this suit was whether Buell had the authority to execute this mortgage. That fact issue could be determined only from the evidence. Clearly, to our minds, appellant's pleading declaring upon this mortgage was not demurrable. So to hold would have the effect of denying appellant the right to plead his title. The facts alleged, if true, established a better title in appellant than that asserted by appellee. We sustain the propositions complaining of this ruling.

At the conclusion of the testimony appellant requested a peremptory instruction, and the overruling of this request is assigned as error. A consideration of the statement of facts filed herein convinces us that the request should have been granted. As above noted, the issue involved was the title to the machinery and tools. Appellee's claim was based upon a mortgage executed by Grider, and appellant's claim was based upon a prior mortgage executed by Buell. If all of the property did not belong to Grider, appellee did not establish its case. The statement of facts filed herein is very meager, and consists of an agreement that the facts therein recited were established by competent evidence, and that same might be used and would constitute a complete statement of facts. These facts disclose by agreement that some of the tools in controversy belonged to Allen Buell, Jr., and some to A. D. Grider. There is no evidence as to what portion thereof belonged to Grider and what portion belonged to Buell. In the face of these agreed facts the jury has found that all of them belonged to Grider, and a judgment has been rendered for appellee on that theory. Clearly, the finding is without any support in the record. The burden was upon appellee to establish his title to the property in controversy, and his evidence did not show what portion of the property belonged to his mortgagor and what portion belonged to the appellant's mortgagor. There was therefore no basis for the judgment. There is an agreed fact that Buell purchased some of the property from appellee and had never paid it therefor. That agreed fact would not authorize a judgment for the appellee. The only title claimed by appellee was under the Grider mortgage. Buell might have been indebted to appellee for the purchase price of the tools, and at the same time have executed a valid mortgage to appellant thereon. No issue was made or presented as to any right of appellee to repossess the tools sold to Buell under any contract it might have had with Buell in the sale thereof, and no issue was made or presented as to the knowledge, if any, appellant had as to any rights of appellee at the time Buell executed the mortgage to him.

We overrule appellant's contention that the judgment in the foreclosure suit upon his mortgage was res adjudicata of the issues in the instant suit. A judgment is binding only upon the parties thereto and their privies. Had appellant desired to adjudicate the validity of appellee's claim upon his mortgage in the original suit, he should have made it a party. No character of judgment was rendered against appellee in that suit, and it is a well settled rule, based upon substantial and fundamental principles of justice, that the property rights of a party cannot be adjudicated in a proceeding to which he is not a party. Had appellee's mortgage been executed after the rendition of that judgment, a different question would arise. The rule is well stated in 34 C. J. 1017, in this language:

"A judgment against a mortgagor of realty, rendered prior to the execution of the mortgage, binds the mortgagee as a privy and is conclusive upon him; but a mortgagee is not bound by any proceedings against his mortgagor which were not begun until after the execution of the mortgage, unless he was made a party thereto. And a judgment against the mortgagee is not binding on the mortgagor, where the latter was not in any way joined in the action. Thus, a mortgagee is not bound by the decree in a suit to foreclose a prior mortgage or other encumbrance if he is not made a party to the suit. Nor is he, unless made a party to the suit, concluded by a judgment or decree enforcing a lien against the property. Similar rules apply in the case of chattel mortgages."

We attach no legal significance to the fact that appellee made application to intervene in the original suit and withdrew such application. The action of the court in permitting same to be withdrawn was not excepted to, and no appeal was taken from the judgment. No character of relief was or could have been granted against appellee in that suit, and it is not bound by the judgment rendered thereon.

The ruling of the court in rejecting certain evidence offered by appellant is assigned as error, but the record fails to disclose any error in that regard. Bill of exceptions No. 1 discloses that appellant objected to certain direct interrogatories and the answers thereto in the deposition of A. D. Grider. This bill does not disclose what any of the interrogatories or the answers were, and the deposition is not contained in the statement of facts. We are not advised in any manner as to the nature of the evidence to which appellant objected, and clearly would not be warranted in holding that the court erred in admitting the same.

For the reasons assigned the judgment of the trial court is reversed, and the cause remanded.

On Rehearing.

Both parties have filed motions for rehearing. Appellant is very earnest in his insistence that we erred in not sustaining his plea of res adjudicata. It is urged that appellee was a junior mortgagee, and that the rules applicable to senior and junior mortgagees should apply. We cannot adopt this view. It has been determined by the jury that the appellant had no valid mortgage, and we...