Pope v. Beauchamp

• Decision Date: 11 December 1918
• Docket Number: (No. 25-2647.)
• Citation: 206 S.W. 928
• Parties: POPE v. BEAUCHAMP et al.
• Court: Texas Supreme Court

206 S.W. 928

POPE v. BEAUCHAMP et al.

(No. 25-2647.)

Commission of Appeals of Texas, Section B.

December 11, 1918.

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

Suit by J. B. Pope against D. M. Beauchamp and others to recover on a note and to foreclose a vendor's lien. Judgment for plaintiff for part of the relief asked was, on appeal by plaintiff to the Court of Civil Appeals (159 S. W. 867), affirmed in part, and in part reversed and remanded, and writs of error were granted to plaintiff and defendant J. L. Rutherford. Reversed, and judgment of trial court affirmed.

V. K. Wedgworth, of Ft. Worth, for plaintiff in error.

R. T. Wilkinson, of Mt. Vernon, and Owsley & Owsley, of Denton, for defendants in error.

Statement of the Case.

MONTGOMERY, P. J.

On the 17th day of January, 1910, J. L. Rutherford was the owner of the Delgado survey in Titus county, Tex., and on that day C. T. Wright, by means of certain fraudulent representations, procured from J. L. Rutherford a conveyance of said land, to him. Rutherford's deed to Wright recited that he had received in payment therefor two vendors' lien notes executed by one G. P. Holford to C. C. Hutcherson. Without going into the details of this transaction, it is sufficient to say that the notes were worthless, and while they purported to be secured by a vendor's lien on certain lands in El Paso county, Tex., no such lands in fact existed. The fraud of Wright was found by both the trial court and the Court of Civil Appeals, 159 S. W. 867. After procuring said deed, on the 20th day of January, 1910, C. T. Wright made a warranty deed conveying the land to D. M. Beauchamp, reciting a cash consideration of $7,000 and the execution of three notes, one for $3,000 due January 20, 1911, and two for $2,000 each, due January 20, 1912 and 1913, respectively.

In fact, Beauchamp did not pay the $7,000 cash, but at Wright's suggestion signed the notes and gave them to him. Beauchamp evidently had knowledge of the fraud, or at least is not in the attitude of an innocent purchaser in good faith. After receiving said notes from Beauchamp, Wright, by written transfer, conveyed the same, together with the vendor's lien, to J. W. Maxwell. This transfer is dated January 20, 1910, but according to the testimony of Maxwell, which is not disputed, the transfer was actually made, acknowledged, and delivered about February 12, 1910. This transfer was filed for record on the 20th day of September, 1910. On March 31, 1910, J. W. Maxwell, by written transfer, conveyed the $3,000 note and one of the $2,000 notes executed by Beauchamp to Wright to Mrs. Dora Stephens, and this instrument was filed for record July 11, 1910. On October 1, 1910, Stephens and wife, by written transfer, conveyed an undivided one-fifth interest in said $3,000 note to V. K. Wedgworth, his attorney; the consideration being to pay Wedgworth for services to be rendered in collecting said note. This transfer was filed for record October 31, 1910. On December 15, 1910, Wedgworth borrowed from plaintiff in error J. B. Pope, the sum of $1,500 and executed to him a note for the amount due one year after date. On December 16, 1910, Mrs. Dora Stephens, joined by her husband at the instance of Wedgworth, for a recited consideration of $350 and a conveyance by Wedgworth to Stephens of 20 acres of land valued at $1,700, conveyed the $3,000 note to the plaintiff in error, J. B. Pope.

The Court of Civil Appeals finds that this note was conveyed to Pope by direction of Wedgworth in order that Pope might hold the same as collateral security to the note given by Wedgworth to Pope for the $1,500 borrowed, and the evidence also conclusively shows that Pope accepted such security, and after receiving the same paid to Wedgworth the $1,500.

There was no contention in the case that Maxwell was in the attitude of an innocent purchaser for value of the note, but the contention is that Stephens and wife, Wedgworth, and J. B. Pope were all innocent purchasers for value and without any notice of the fraud of Wright.

On the 22d day of January, 1910, being only five days after the execution of the deed by Rutherford to Wright, Rutherford filed suit in the district court of Titus county, Tex., against Holford, Hutcherson, and Wright to cancel the deed executed by Rutherford to Wright, and to recover the M. V. Delgado survey, being the same land conveyed by Rutherford to Wright, and on the 24th day of January, 1910, Rutherford filed an amended petition making Will C. Geers and D. M. Beauchamp parties to the suit, and at the same time procured to be issued in said cause a writ of injunction restraining Wright and Geers from disposing of the notes executed by Beauchamp, and on the 24th day of January, 1910, filed in the office of the district clerk of Titus county a notice of lis pendens showing the pendency of said suit. On the 11th day of October, 1910, judgment was rendered in said cause for Rutherford for the land and canceling the deed which he had executed to Wright and the deed from Wright to Beauchamp, and revesting in him the title and possession of the land. This suit was instituted by J. B. Pope on February 1, 1911, as the assignee of the $3,000 note above referred to, against D. M. Beauchamp as maker, and J. W. Maxwell and C. T. Wright as indorsers, and also making J. L. Rutherford a party. Judgment is asked against D. M. Beauchamp as maker and Maxwell and Wright as indorsers, for the amount of the note, with interest and attorney's fees, and for foreclosure against all of the defendants. The petition alleges that the defendant J. L. Rutherford is asserting some right to the premises adverse to the plaintiff. All the defendants were served except Wright, and the plaintiff entered a nonsuit as to him. Rutherford answered, among other things, by pleading fraud by which Wright secured from him the deed referred to in these findings, and in addition thereto set up the entire proceeding in the case of Rutherford v. Wright and Others in Titus county, and pleaded the judgment in that case as a bar to the plaintiff's suit in so far as it sought a foreclosure against him. He also pleaded the filing of the lis pendens notice in said suit.

The case was tried in the district court by a jury, and on a verdict of the jury the court rendered judgment in favor of the plaintiff, J. B. Pope, against D. M. Beauchamp as principal, and J. W. Maxwell as indorser, for the sum of $4,225.92, being the amount of said note, principal, interest, and attorney's fees, and rendered judgment in favor of the defendant J. L. Rutherford, refusing the plaintiff any foreclosure on the land. From this judgment J. B. Pope alone appealed, and the Court of Civil Appeals for the Seventh District, to which the case had been transferred, affirmed the judgment as between J. B. Pope and D. M. Beauchamp and J. W. Maxwell, but reversed the judgment in favor of Rutherford, and rendered judgment foreclosing the vendor's lien on the land in question to the extent of $1,500, with interest thereon from December 17, 1910, at the rate of 6 per cent. per annum. Both Pope and Rutherford made motions for rehearing in the Court of Civil Appeals, which were overruled, and both applied to this court for writ of error (165 S. W. xvi). Both writs were granted, and the whole case is now before us.

Opinion.

The application of the plaintiff in error, Pope, in this case, was granted by the Supreme Court for the reason that the court was of opinion that there was probable error in the holding of the Court of Civil Appeals to the effect that under the facts found by the Court of Civil Appeals the burden of proof was on the plaintiff, Pope, to show that Stephens and wife were good-faith purchasers of the note. The Supreme Court indicated in granting the writ that under the facts found this holding was probably in conflict with the decision in the case of Prouty v. Musquiz, 94 Tex. 87, 58 S. W. 721, 996. The petition of Rutherford for writ of error was also granted, and we therefore have the whole case before us.

As applied to negotiable notes, the rule announced in the case of Prouty v. Musquiz, supra, is the accepted rule in this state. We do not think it necessary to analyze the facts surrounding the purchase of the note by Stephens and wife for the purpose of determining whether or not there "were any circumstances in the evidence tending to show bad faith in the transaction on the part of" Stephens and wife so as to cast the burden of showing good faith on the plaintiff, Pope, who claimed through Stephens and wife.

The view we take of the case is that...