Ramirez v. Bell

• Decision Date: 27 July 1927
• Docket Number: (No. 7098.)<SMALL><SUP>*</SUP></SMALL&gt
• Citation: 298 S.W. 924
• Parties: RAMIREZ et ux. v. BELL et al.
• Court: Texas Court of Appeals

298 S.W. 924

RAMIREZ et ux. v. BELL et al.

(No. 7098.)^*

Court of Civil Appeals of Texas. Austin.

July 27, 1927.

On Motion for Rehearing, August 6, 1927.

Appeal from District Court, Travis County; George Calhoun, Judge.

Suit by Jesus Ramirez and wife against Harris Bell and another to cancel a deed and a deed of trust. From a judgment canceling the deed, and awarding plaintiffs judgment against the grantee therein, and establishing and foreclosing the deed of trust, plaintiffs appeal. Reversed and remanded.

Hart, Patterson & Hart, of Austin, for appellants.

Garrett, Brownlee & Goldsmith, of Austin, and W. R. Smith, Jr., of Odessa, for appellee Wendlandt.

Harris Bell, of Austin, Marshall O. Bell, of San Antonio, and D. J. Pickle, Warren W. Moore, O. Dickens, and Cofer & Cofer, all of Austin, for appellee Bell.

McCLENDON, C. J.

Jesus and Refugia Ramirez, husband and wife, sued Harris Bell and Charles Wendlandt, Jr., (1) to cancel appellants' deed of June 25, 1925, conveying to Bell their homestead of 121.64 acres of farm land in Bastrop county; and (2) to cancel Bell's deed of trust to Wendlandt of August 6, 1925, securing $5,000, by lien upon the same property.

Trial to jury; directed verdict; judgment: (1) As to Bell, canceling his deed and awarding appellants $3,136.15 against him; and (2) as to Wendlandt, establishing and foreclosing his trust deed lien. Separate appeals (1) by Ramirez and wife against Wendlandt; and (2) by Bell against Ramirez and wife.

In the Bell appeal we are affirming the judgment canceling his deed. See opinion, 298 S. W. ___.

The correctness of the directed verdict establishing and foreclosing the trust deed lien depends upon whether the evidence conclusively shows Wendlandt to be a bona fide purchaser.

The pertinent facts, which are in large measure without substantial dispute, follow:

Ramirez and wife were ignorant Mexicans, speaking English sufficiently only to the ordinary transactions of people engaged in farming. In 1912 they bought the property (then raw land) from Seelig for $7,000, paying $1,000 in cash. The balance they had reduced to $1,860 in 1922, when it was extended so as to be paid off $310 annually; and to $1,434.20 when the trust deed was executed. Ramirez and his family lived on the property continuously after its purchase, put part in cultivation, and made some small improvements, suited to residence, use, and occupancy as a farm by persons of their limited means and station. In the summer of 1925 the property was worth from $9,000 to $15,000. Wendlandt loaned the $5,000 on his estimate of value at $9,000 to $10,000 for loan purposes. Seelig valued it at from $10,000 to $15,000. A reputable loan mortgage company to whom Bell applied for a loan placed the value at $10,500, and was willing to make a loan of $6,500, at 6½, per cent,, but "turned it down" on finding Ramirez in possession. Bell represented to this company that the property was worth $16,750.

The Bell deed was executed under these circumstances: Ramirez had been indicted in Bastrop county on four felony charges of violating the liquor law. He engaged Bell to defend him, executing on June 20, 1925, his note for $1,000 which Bell claimed was only a retainer, and which he agreed to secure by lien on the farm, and the same day Bell had him execute an instrument designating an unimproved lot in Austin, which he had never occupied, as the homestead of himself and family. This designation was recorded in Bastrop county July 6, 1925, 11 days after execution of Bell's deed. Bell also prepared a trust deed to secure the $1,000 note for execution by Ramirez and wife, but, upon ascertaining from another attorney that a lien on a homestead would not be valid, he destroyed it. Ramirez and wife signed and acknowledged (before a notary employed in Bell's office) the Bell deed on July 25, 1925, Bell claiming it to be a conditional sale; Ramirez and wife claiming it to have been fraudulently represented to them as a mortgage to secure the $1,000 note. Bell, born and reared in Austin, was a young lawyer of about 2 years' practice. Wendlandt, 32 years old, had lived in Austin since 1901, and had been in the real estate and loan business there since he was 17. He knew Bell, but not intimately; had had no business dealings with him. Bell, his negotiations with the mortgage company, having failed, made to Wendlandt two verbal applications for loan about a week apart. The first (about the middle of July, 1925, or a little later) was refused because Wendlandt was not then in funds. The second terminated in the loan and trust deed in issue. Wendlandt agreed to inspect the land and make a loan if the security was good. He went with Bell and inspected the land. They stopped at Ramirez's house, where they left their car, and upon returning after the inspection, Wendlandt asked Bell if a certain Mexican boy he saw on the place was renting it. Bell answered "No"; that that was the fellow he bought the place from, and then (quoting Wendlandt):

"I asked him if that boy owned the farm, and he said `No; the old man did,' but I did not see any old man then; and then he said the Mexican was going off the farm and that Mr. Walter was going to look after it. I saw the Mexican man before I left there. I saw him out in the front yard when I walked up to the car or towards the car, and Mr. Walter and Mr. Bell stopped back in the cowlot, or right close to the lot. I talked to the Mexican. I spoke to him in English, and he spoke to me. I would recognize that Mexican if I were to see him. He is the same Jesus Ramirez. At the time I was out there was the first time that I ever seen him. I do not know yet whether that was the man who was supposed to have owned the farm. When I first spoke to the Mexican, I said, `Howdy,' and then I asked him whether he was going to work the land, and he said, `No'; he was going to move to San Antonio."

While returning to Austin Wendlandt agreed to loan Bell $5,000 on the place, if Judge Doom should approve the title. Bell delivered to Doom an abstract of title certified to July 4, 1925, together with the original Ramirez deed which had not then been recorded. Doom required recording this deed and the abstract, including it, certified to date. All this was done on August 4, 1925. Two days later Doom gave Wendlandt a written opinion (supplementing an opinion of December 30, 1899, by his father to Seelig), in which he certified that, subject to the Seelig debt and taxes, the abstracts, "together with my examination of the abstract company's books, show good title in Harris Bell." The loan was consummated on August 6, 1925, by Bell's executing the trust deed and three 8 per cent. notes, two for $500, due October 1, 1926, and 1927, respectively, and one for $4,000, due October 15, 1930. Wendlandt paid off the Seelig debt ($1,434.20) and taxes ($439.75), total, $1,873.75; and paid Bell the residue of the loan in money. Wendlandt had no actual knowledge of any infirmity in the Ramirez-Bell conveyance and relied on his own inspection as to value and Doom's opinion as to Bell's title.

The three following propositions embrace the substance of appellants' contentions to the effect that Wendlandt was not, as a matter of law, a bona fide purchaser:

(1) Appellants being in possession of the property when Wendlandt inspected it, and Bell's deed not being then of record, Wendlandt was charged as a matter of law with notice of appellants' claims.

(2) Appellants' evidence that they signed the Bell deed upon representation that it was a mortgage raised the issue of the genuineness of the instrument as their act. In other words, under this evidence, the deed was in law a forgery and void.

(3) The facts and circumstances in evidence were sufficient to put Wendlandt upon inquiry as a matter of law — or, in any event, were sufficient to support a jury finding that Wendlandt was put upon inquiry — with reference to the claim of appellants.

We will consider these contentions in the above order.

Generally speaking, possession of real estate "is equivalent to registration" (Mainwarring v. Templeman, 51 Tex. 205), and is constructive notice of the possessor's right or claim, in that, as a matter of law, it puts a purchaser upon inquiry as to the nature of the claim of right of the possessor, and in the absence of proper inquiry the law charges the purchaser with notice of that claim upon the presumption that proper inquiry would disclose it. This rule is elementary.

Where a grantor, after executing a deed in proper form and in terms absolute as an alienation of his title, continues in possession, it is held in this and some other jurisdictions that a purchaser may rely upon the terms of the deed as a declaration of the grantor that he has parted with title, and, as a matter of law, he is relieved of further inquiry. Eylar v. Eylar, 60 Tex. 315; Hurt v. Cooper, 63 Tex. 362; Heidenheimer v. Stewart, 65 Tex. 321; Love v. Breedlove, 75 Tex. 649, 13 S. W. 222; Graves v. Kinney, 95 Tex. 210, 66 S. W. 293; Stephens v. Summerfield, 22 Tex. Civ. App. 182, 54 S. W. 1088 (writ of error denied); Cooper v. Ford, 29 Tex. Civ. App. 253, 69 S. W. 487 (writ of error denied); Bryant v. Sons of Herman (Tex. Civ. App.) 152 S. W. 714 (writ of error denied); Brooker v. Wright (Tex. Civ. App.) 216 S. E. 196; Sperry v. Moody (Tex. Civ. App.) 269 S. W. 272; Welborn v. Earle (Tex. Civ. App.) 268 S. W. 982.

Some jurisdictions hold to the contrary. 39 Cyc. 1753; 2 Tiffany, Real Property (2d Ed.) 2238. Tiffany makes the following comment on the rule followed in this state:

"One difficulty with this latter view is that it imputes to a conveyance an effect as a declaration by the grantor, for the purpose of raising an estoppel against him, which is not necessarily in accord with the understanding of the parties or with the legal effect of the conveyance. One executing, for instance, a conveyance of a fee-simple title, may perfectly well...