Steffian v. Milmo Nat. Bank

• Decision Date: 20 January 1888
• Citation: 6 S.W. 823
• Parties: STEFFIAN <I>et al.</I> v. MILMO NAT. BANK.
• Court: Texas Supreme Court

Page 823

6 S.W. 823

STEFFIAN et al. v. MILMO NAT. BANK.

Supreme Court of Texas.

January 20, 1888.

Appeal from district court, Webb county; JOHN A. RUSSELL, Judge.

Action by the Milmo National Bank against A. C. Hunt and Peter Steffian, on a promissory note. Defendant Steffian died, and Refugia Steffian, as his executrix, was substituted. Judgment for plaintiff, and defendant Steffian appeals.

Lane & Atlee and C. Upson, for appellant. W. Showalter and J. O. Nicholson, for appellee.

GAINES, J.

This suit was originally instituted in the court below by the appellee against A. C. Hunt to recover on a note for about $10,000, made payable to it by Hunt, and to foreclose a mortgage executed by him to secure the note. The petition alleged that Peter Steffian was setting up a claim to the land conveyed by the mortgage, and he was also made a party defendant. Steffian having died before the trial, appellant, as executrix of his will, made herself a party defendant. Upon the trial the court gave judgment for the amount of the note, and decreed a foreclosure of the mortgage. From this judgment the executrix alone appeals.

The nature of the controversy sufficiently appears upon the conclusions of fact found by the court below, which are as follows: "First. That on the twenty-eighth of February, 1882, Peter Steffian, deceased, executed a general warranty deed to the defendant, A. C. Hunt, for the lands in controversy in this suit; that the consideration of sixteen thousand dollars mentioned therein was recited to have been paid; that the deed was signed by said Steffian in the presence of two subscribing witnesses; that there was an understanding between said Steffian and Hunt that said deed should remain in the possession of said Steffian until the full amount of said consideration was paid; that on May 29, 1882, said Hunt paid eleven thousand dollars of the said consideration, and afterwards, on the _____ day of _____, 1883, the further sum of $1,500. Second. That on the twenty-ninth day of March, 1883, said A. C. Hunt was indebted to the Milmo National Bank, plaintiff herein, in the sum of ten thousand three hundred and thirty-seven dollars and ninety-six cents, which was on that day past due; that, in order to get an extension of time on said indebtedness, he offered to give the bank a lien on the land described in the aforesaid deed of Steffian to Hunt, and placed or caused to be placed in possession of the plaintiffs the deed of Steffian to Hunt; that it was at that time generally known and understood in the community that said Steffian had sold said land to said Hunt; that plaintiff, in consideration of said lien on said land, granted to said Hunt an extension of ninety days on his said indebtedness, whereupon said Hunt, on the said twenty-ninth day of March, 1883, executed and delivered to said bank his note for said indebtedness and a deed to said land; that, while said deed was an absolute conveyance on its face, it was understood by and between said Hunt and said bank that it was only intended as a security for said debt; that at the date of the execution and delivery of said note and deed by said Hunt to said bank, its officers or agents had no knowledge or notice, either actual or constructive, that said Hunt had not paid all the purchase money for said land. Third. That said Peter Steffian placed his said deed to said Hunt in said Hunt's possession before the execution and delivery of the note and deed from said Hunt to said bank, upon representation of said Hunt to said Steffian that he, the said Hunt, wanted the same for the purpose of copying the field-notes of the land therein described. Fourth. That plaintiff, its officers or agents, did not, at the time of the execution and delivery by Hunt of said note and deed to said plaintiff, have any notice or knowledge that said Steffian had not delivered his said deed to said Hunt as an evidence of his sale of the said land to said Hunt."

From these findings the court concluded, as a matter of law, that appellee was a bona fide purchaser, for a valuable consideration without notice, and that its claim was therefore entitled to priority over that of appellant, and this is assigned as error.

If the law of innocent purchaser be applicable to appellee's case, we have no doubt it must be deemed a purchaser for value. This court has held that where the consideration of a deed is an antecedent debt only, or where a mortgage is taken merely to secure indebtedness, this is not sufficient to support the claim of a bona fide purchaser for a valuable consideration. McKamey v. Thorp, 61 Tex. 648; Spurlock v. Sullivan, 36 Tex. 511. There being no new consideration, should the grantee or mortgagee loose the land or his lien upon it, he still has his debt; and for that reason is held to have parted with nothing of value. But should the mortgagee give time...