Mulholland v. Jolly

• Decision Date: 17 April 1929
• Docket Number: (No. 8196.)
• Citation: 17 S.W.2d 1109
• Parties: MULHOLLAND v. JOLLY et al.
• Court: Texas Court of Appeals

17 S.W.2d 1109

MULHOLLAND v. JOLLY et al.

(No. 8196.)

Court of Civil Appeals of Texas. San Antonio.

April 17, 1929.

Rehearing Denied May 29, 1929.

Appeal from District Court, Nueces County; W. B. Hopkins, Judge.

Action by William Mulholland against W. J. Jolly and others. From the judgment, plaintiff appeals. Affirmed.

Kleberg & North and M. G. Eckhardt, Jr., all of Corpus Christi, for appellant.

Boone & Savage, of Corpus Christi, and Henry & Bickett, of San Antonio, for appellees.

FLY, C. J.

Appellant filed a statutory action in trespass to try title against W. J. Jolly, D. H. Clark, Bert Ashton, the Texas Farm Mortgage & Investment Company, and R. N. Martindale, trustee, the land sought to be recovered being described as: "Farm Tract No. 3, of the Geo. H. Paul Subdivision of the Famous Driscoll Ranch, containing 101.95 acres of land, according to the map or plat of said subdivision on file and of record in the office of the County Clerk of Nueces County, Texas, which land is out of and a part of the Joaquin Lopez de Herrera Original Grant, Abstract 607, and also of the Marian Lopez de Herrera Grant, Abstract 606." Jolly and Clark pleaded all the circumstances by which they had been delivered a deed purporting to be executed and acknowledged by appellant, and had paid the value of the land through a check to appellant, which had been collected by some one claiming to be appellant; that they went into possession of the land in good faith, and made valuable improvements thereon, and had borrowed money from the Texas Farm & Investment Company, and had executed a lien on the land to secure the loan, and that they discovered that appellant had never executed the deed, but that it was a forgery, and they surrendered possession of the land to appellant, only demanding of him that he repay a certain sum which they had paid to lift a mortgage from the land which had been executed by appellant, and repay the taxes paid by them on the land and the value of improvements made by them on the land in good faith. They filed a cross-action for the improvements, taxes, and amount paid to cancel the lien on the property. The Mortgage & Investment Company answered, setting up its claim against its codefendants, asking for judgment for its debt and foreclosure of its lien on the property. It also alleged a change of name to Martindale Mortgage Company.

The cause was tried by the court, a jury being waived, and judgment rendered that appellant was in possession of the land and was in full possession when the original petition was filed, but was entitled to recovery of title to the land; that W. J. Jolly and D. H. Clark were entitled to recover of appellant the value of the permanent improvements placed by them on said land, and the taxes paid by them on the land; that the Mortgage Company recover of appellant the amount owed by him to the Deming Investment Company, secured by a lien on the land in question, which was paid with money advanced by said mortgage company, and that it be subrogated to the lien held by the Deming Investment Company; that the Mortgage Company recover of Jolly and Clark the amount for permanent improvements and taxes; and that the mortgage company be subrogated to their claim and lien and those of Ashton. It was therefore decreed that appellant recover of Jolly and Clark and the Martindale Mortgage Company the title to the land in controversy, and be quieted in such title, subject to the amounts adjudged against him and liens established against the land. The amount of the recovery of the Martindale Mortgage Company against appellant on the amount due the Deming Investment Company was fixed at $1,252.24, the amount of the claim of Jolly and Clark for permanent improvements and taxes was fixed at $3,408.77, less the sum of $421.46, for fences destroyed and amount of rents, leaving a balance in favor of Jolly and Clark of $2,977.31, and a lien for that sum was foreclosed on the land, and Martindale Mortgage Company was subrogated to the amount of the recovery of Jolly and Clark and to the lien on the land in their favor. Judgment was also rendered against Bert Ashton in favor of Jolly and Clark for rent amounting to $118.12. This appeal was perfected by appellant.

It was agreed by the parties that William Mulholland was the owner of the land on September 17, 1925, and it conclusively appeared that he had owned it since his purchase of it in July, 1910, and that he had never sold or executed any deed to the land or any part thereof, and that he did not execute the deed purporting to have been made by him to D. H. Clark, through which Jolly and Clark had claimed the land. The forgery of the deed and sale of the land to Jolly and Clark was accomplished through M. C. Nelson and W. B. Rachal, neither of whom was known to appellant. The deed recited that appellant was temporarily residing in New Orleans, which he denied. The forgery was proved and admitted. None of the appellees had any knowledge or suspicion of the forgery, but all of them acted in good faith. Jolly and Clark made permanent improvements on the land in good faith, believing that they had good title to the land, and the mortgage company made a loan to Jolly and Clark, and in good faith took a lien on the land to secure the loan. There were no circumstances connected with the execution to arouse the suspicions of any man, no matter how prudent and cautious, as to the authenticity of the deed. As soon as Jolly and Clark learned that appellant claimed that the deed was a forgery, they made a thorough investigation, and, being convinced that the deed was a forgery, they surrendered possession to appellant, and at the time the suit was instituted they were not in possession of the land, and did not claim any title to it. Appellant admitted, before bringing the suit, that he was liable for amounts paid to satisfy the debt and lien held by the Deming Investment Company and for the taxes that became due on the land, but never repaid the same, but afterwards instituted the suit.

On its face this is a statutory action of trespass to try title, but in deed and in fact could have been nothing more than a suit to have a forged deed declared void, and the cloud created by it and the lien held by the mortgage company on appellant's title removed. Appellees made no claim to the land, but admitted that the title was in appellant. They did not plead possession of the land for a year nor claim pay for the improvements under the statute, but set out the facts upon which they prayed for the intervention of a court of equity in their behalf. Independent of article 7393, Rev. St. 1925, which extends to a defendant the privilege of recovering pay for permanent and valuable improvements made while in possession in good faith of land adversely held for the period of at least one year before the action for trespass to try title is begun, they sought recovery by cross-action of their expenditures on the land. Appellant did not really enter a court of law to try title to the land; his title was not impugned; he had possession of the land; and could not prove a case of trespass to try title. No one was claiming title to his land; no one was in adverse possession of it. He knew those facts and knew that he could accomplish nothing, except to remove a cloud from his title caused by the forged deed and the mortgage. He was seeking equitable relief, and, in order to obtain it, was compelled to do equity by paying for the permanent improvements and refunding amounts paid to protect the title to the land.

This equitable principle is thus stated in Pomeroy, Equity Jurisprudence, § 1241: "The right to a contribution or reimbursement from the owner, and the equitable lien on the property benefited as a security therefor, have been extended to other cases where a party innocently and in good faith, though under a mistake as to the true condition of the title, makes improvements or repairs or other expenditures which permanently increase the value of the property, so that the real owner when he seeks the aid of equity to establish his right to the property itself, or to enforce some equitable claim upon it, having been substantially benefited, is required, upon principles of justice and equity, to repay the amount expended." The text is supported by quite an array of decisions cited in footnote.

In one of the cases cited the innocent purchaser had paid off a mortgage on the land, and thereby became subrogated to the right of the mortgagor, and it was held that the owner, in seeking the aid of a court of equity, should refund, as he was bound to do to get relief; and that, where the purchasers have paid the assessments and taxes and made improvements in good faith, "he cannot complain that as a condition of regaining possession, he is compelled to account for and pay such taxes, assessments and for such improvements, according to the just and enlightened principles of courts of equity." Miner v. Beekman, 50 N. Y. 339. See, also, Lyons Nat. Bank v. Shuler, 199 N. Y. 405, 92 N. E....