Sperry v. Moody

• Citation: 269 S.W. 272
• Decision Date: 30 December 1924
• Docket Number: (No. 2982.)
• Parties: SPERRY v. MOODY et al.
• Court: Court of Appeals of Texas

269 S.W. 272

SPERRY v. MOODY et al.

(No. 2982.)

Court of Civil Appeals of Texas. Texarkana.

December 30, 1924.

Rehearing Denied February 19, 1925.

Appeal from District Court, Lamar County; Newman Phillips, Judge.

Suit by Caroline E. Moody and another against Clarence Sperry and others. From a judgment for plaintiffs, defendant Clarence Sperry appeals. Reversed and remanded.

Appellee Caroline E. Moody owned a parcel of land in Paris, Tex., in her own separate right, and with her husband, appellee Frank J. Moody, resided on and used same as their homestead. On January 20, 1922, the Moodys entered into a contract (in writing) with one David Glueck, whereby they agreed to purchase certain land in Gary, Ind., and to pay Glueck $4,200 therefor. $1,600 of said sum was to be paid by the conveyance to Glueck of the land in Paris, and the remainder thereof was to be paid in monthly installments of $25, and interest, each. In performance of their undertaking, the Moodys on January 21, 1922, by a deed of that date, conveyed the Paris property to Glueck. The consideration for the conveyance, according to a recital in the instrument, was $1,600 then paid to the Moodys, but, as a matter of fact, nothing was then or ever paid to them, and the real consideration was the undertaking of Glueck to convey the Gary land to them. The deed was duly filed for record in Lamar county on the day of its date. By a deed dated April 1, 1922, Glueck conveyed the Paris land to appellant Clarence Sperry, who, on April 11, 1922, entered into a contract whereby he bound himself on terms specified to sell and convey it to London Moody. In the contract between appellees and Glueck, the latter undertook to build a dwelling house, as specified on the Gary land and then to convey same to the former, but he failed to do so.

This suit was by appellees against Glueck, Sperry, and London Moody. It was to cancel the deed to Glueck for fraud practiced by him on appellees, and to quiet appellees' title to the land. Glueck made no answer to the suit. Sperry and London Moody answered by a plea of estoppel, and that Sperry was an innocent purchaser for value from Glueck, and entitled to protection as such. In a cross-action Sperry sued appellees, as in trespass to try title for the land, and for damages. In response to special issues submitted to them the jury found as follows: (1) That the deed from appellees to Glueck was "procured by fraud on the part of Glueck." (2) That Sperry had notice at the time he purchased and paid Glueck for the land "that Glueck had procured the conveyance" from appellees by fraud. (3) That, contrary to a contention by Sperry, Caroline did not tell him before he bought the land that Glueck owned it, and that she was soon going to leave it and move to Gary. (4) That London Moody knew when he entered into the contract with Sperry that appellees "were setting up a claim to the property." (5) That the rental value of the property was $10 a month. The appeal is by Sperry alone, from a judgment granting appellees the relief they sought.

A. P. Parks, of Paris, for appellant.

Allen & Baughn, of Paris, for appellees.

WILLSON, C. J. (after stating the facts as above).

After instructing the jury that the burden was on appellees to show that they were induced to execute the deed to Glueck by fraud practiced on them, the trial court further instructed the jury that if the execution of that deed was so procured the burden was on Sperry to show that "he purchased the property in good faith, and without notice of such fraud." Sperry excepted to the instruction so far as it placed the burden of proof on him as stated, and insists here that the action of the court in overruling his exception was error which entitled him to a reversal of the judgment.

The legal title to the Paris land was in appellee Caroline Moody it seems. The effect of the deed made by her and appellee Frank Moody to Glueck, and the deed made by Glueck to Sperry, was to pass that title to Sperry. The right (if any) of appellees to the land after they made the deed to Glueck was an equitable one. 27 R. C. L. 693. The rule in this state, as we understand it, is that, in a contest between the owner of such a right and the holder of the legal title, the burden is on the former to prove that the latter had notice of the equitable right at the time he acquired the legal title. Rand v. Davis (Tex. Civ. App.) 27 S. W. 939; Hopkins v. Walters (Tex. Civ. App.) 224 S. W. 516; Laffare v. Knight (Tex. Civ. App.) 101 S. W. 1034; McAlpine v. Burnett, 23 Tex. 649; Catrell v. Brown Hardware Co. (Tex. Civ. App.) 86 S. W. 1045; Phillips v. Webb (Tex. Civ. App.) 40 S. W. 1011; Wallis v. Dehart (Tex. Civ. App.) 108 S. W. 180; Meador v. Hines (Tex. Civ. App.) 165 S. W. 915; Wootton v. Thompson, 119 S. W. 117, 55 Tex. Civ. App. 583; Saunders v. Isbell, 24 S. W. 307, 5 Tex. Civ. App. 513; Hill v. Moore, 62 Tex. 610; Simkins' Equity, 667.

Appellees are of the opinion, it seems, that the rule is to the contrary of the way it is stated above, and they cite several cases as authority supporting their view. But we think only one of the number cited, to wit, Low v. Gray, 61 Tex. Civ. App. 487, 130 S. W. 270, does support it. In that case, as here, it seems, the plaintiff was asserting an equitable right against holders of the legal title, and the court held that the burden was on the latter to prove that they were without notice of the plaintiff's right at the time they acquired such title. The case seems to be in conflict with cases mentioned above, and to have never been followed or cited, except in Morrison v. Cotton (Tex. Civ. App.) 152 S. W. 866, where it is referred to as authority for the statement that:

"It is settled law in this state that before a vendee can recover as an innocent purchaser he must prove, independent of the consideration recited in the deed, that he paid value for the land, and that he took the same without notice of the fraud, if any."

We understand the rule to be as stated where the contest is between the holder of the legal title under an unrecorded deed, and a subsequent purchaser from the same vendor, but it is subject to an exception, which the court declared, in Peterson v. McCauley, 25 S. W. 826, to be "as well-established as the rule itself," and which exception is stated as follows:

"Where the...