Ellis v. Singletary

Roberts, Chief Justice.

This is a suit brought ou a note by Singletary, for the use of Wynne against W. H. Clark, one of four makers of a joint and several note, the other three being dead, to recover a judgment against Clark for the amount due on said note, and against John Ellis, to subject land to which he has the legal title, to a vendor’s lien. Plaintiff"recovered a judgment. Clark did not appeal, — Ellis did. The matter in issue is, whether or not the judgment subjecting the land to the vendor’s lien, in discharge of the recovery against Clark on the note, is erroneous, as contended by Ellis, who has appealed.

The errors assigned are numerous, and cover all possible grounds of" error that can be raised upon the proceedings in the record; and it will suffice to consider such questions as properly arise under them, without following them in detail.

It is contended by Ellis that no vendor’s lien attached to the note sued on in the hands of the plaintiff". The land was sold by Ellis to Kirksey, for which he took four notes, payable to himself, one of which he transferred to Hogue, in payment of a debt, and Hogue, in payment of a debt, transferred and indorsed it to Robinson, Singletary & Co., of which firm Singletary was the surviving partner. It was proved that this note expressed that it was given for the land known as the Cedar Landing tract., on the Trinity river. Afterwards, Kirksey sold the land to Howell Holliman, who executed three notes to Ellis, in place of the three Kirksey notes still held by him; and after he went into possession of the land under a deed from Kirksey, gave his note, signed also by Clark and two other Hollimans, to Robinson, Singletary & Co., in exchange for the Kirksey note held by them. This substituted note expressed that it was given for the Cedar Landing tract of land. It was proved by Hogue that he, Kirksey, and Ellis knew of this substitution, and that he and Kirksey desired it to be done. It was proved by Robinson that in receiving the Holliman note in exchange for the Kirksey note, it was expressly understood between him and Howell Holliman, who *36 made the exchange with him, that the vendor’s lien on the land was still retained, and that the other makers’ names on the note were only an additional security for its payment; and further, that Hogue advised him to retain the vendor’s lien. The evidence in support of these facts is sufficient to support the verdict of the jury; and therefore they must be regarded by this court as established, in considering the questions of law arising upon them.

The mere fact of substituting the Holliman note for the Kirksey note held by Robinson, Singletary & Co., did not destroy the lien, if it then existed. (Pinchain v. Collard, 13 Tex., 336.) That the indorsement of the note by Hogue to Robinson, Singletary & Co. did not release the lien is not to be presumed, for it would have been contrary to the interest of both parties. Such a presumption is farther rebutted by Hogue’s desire for the substitution, and his advice to them to retain the lien on the land in the exchange of the notes. *

There being sureties on Howell Holliman’s note, thus substituted, might, if unexplained, raise a presumption that the vendor’s lien was released. When land is sold, and the purchase-money is not paid, the lien attaches as matter of course. Its release must he shown by such facts as show that it was intended by the parties not to he relied on as a security for the unpaid purchase-money. Talcing a note, being mere evidence of the debt, is not such a fact. Taking sureties on the note is a fact tending in that direction, from which such intention may he presumed. Hot, however, if there is that stated in the note which shows it was not so intended, as in this case, where it is expressly stated that it was given for the Cedar Landing tract, which could have been for no other purpose than to indicate the intention of the contracting *37 parties not to release the lien by the additional security; and if tins should be regarded ambiguous in its import, its object to that end was fully explained by the evidence of Eobinson, who was properly allowed by the court to explain the circumstances under and purpose for which that expression was inserted in the note given by Holliman, just as he might explain that the note given for the land, if it had not been so expressed, without violating any rule of evidence.

The release of the lien is a question of fact dependent upon the evidence establishing the intention of the parties not to rely on the land as a security, or as one of the securities, for the payment of the unpaid pmchase-money. (Parker County v. Sewell, 24 Tex., 238 — referring to Macreth v. Symmonds, 15 Ves. R., 384; 4 Kent’s Comm., 171; 2 Story’s Eq. Jur., 590, 7th ed.)

We cannot say that the evidence was insufficient to establish that the lien was not released, as found by the verdict and sanctioned by the judgment of the court.

The next question arises upon the re-acquisition of the land by Ellis through Pollard.

Holliman and wife conveyed the land to Pollard, for ten thousand dollars in Confederate money paid down, under a promise to take up the notes which constituted a lien upon the land. Three of the Holliman notes that had been substituted for the Kirksey notes were in the hands of Ellis, only one of which was paid in Confederate money, by Holliman to Ellis, and one of said notes was then in the hands of Eobinson, Singletary & Co.

The evidence as to whether Pollard had notice of the last-named note at the time of his purchase, though conflicting, is sufficient to sustain the finding of the jury in favor of it.

Pollard, rather than pay off the notes, transferred the land, with some stock on it, to Ellis, for three hundred dollars in gold, he then owning two of the Holliman notes for §1,312.50, for which the land was bound.

It is contended by Ellis that he holds the legal title through *38 a bona fide purchaser for a valuable consideration; and if the evidence is against him in that, by the notice to Pollard that still he has obtained the legal title, and holds it by a superior equity, by virtue of his two unpaid notes, which constituted the moving inducement for Pollard to convey to him for three hundred dollars; and that at least, having set out the notes in his answer, the court erred in not submitting a charge to the jury as requested by him, which would have enabled the jury to find a verdict which would have required the court to have enforced the lien of his two notes on the land concurrently with that of the plaintiff’s note. As to the first proposition, it is not perceived how his obtaining the title from Pollard would perfect his right to the land by virtue of his lien, when that title was acquired under notice of plaintiff’s lien, or of the facts which constituted such lien, Pollard also having such notice; all which is so established by the evidence, and confirmed by the verdict, as not to be disputed on error in this court.

As to the second proposition, the same answer may be given as was given by the coind below in refusing the charge ; which is, that it was not applicable to the case. The charge requested was, in effect, that the jury should find whether or not his notes constituted a lien upon the land, if they so found as to note of plaintiff. The reason why such a charge was not applicable to the case was, that the notes were not pleaded in a way to indicate the design of making them the founds tion of an adjudication and decree in this suit, partitioning the interest in the land between those having hens, by a sale of it, and a division of the proceeds proportioned to their respective rights.

But his notes were recited in explanation of the purchase from Pollard, and to fortify the small consideration given to him for the land.

A further reason was, that other facts shouldhavebeen stated by Ellis in that connection, particularly the present value of the land, and anything else that would have shown it to be *39 inequitable to appropriate a disproportionate amount of the value of the land in satisfaction of the lien of the one note sued on. As, for instance, if it were alleged and proved that the land is now worth only the amount of this note, it might he inequitable to allow it to be appropriated to the payment of this note, when there were two other notes of the same size in Ellis’s hands that had not been paid. In that view also it would have been proper for Ellis to have consented to hold his legal title in trust, subject to the disposition of the court, in satisfaction of all of the valid liens that might be established in the suit.

If, however, the land was worth ten thousand dollars, the enforcement of a valid lien for about one fifth of its value would not have the effect to exclude Ellis from the benefit of his liens, for double that amount already seemed by his legal title, without a suit from Pollard. These allegations were not made in the answer so as to raise the equity in favor of Ellis, and put the court in motion to give him such affirmative relief. He did not put himself in the attitude of aiding the court to adjust and to satisfy the equities, but preferred rather to stand upon his legal rights in the defensive as a legal cover and protection to whatever equities he had. So the case is exhibited in the pleadings and evidence throughout.

The next question arises upon the effort of Ellis to take shelter under Billingsley, as a bona fide purchaser for a valuable consideration, without notice of this lien attaching to the note sued on.

Giving the legal effect to the facts, rather than a minute detail of them on this question, after Ellis was in possession of the land under the Pollard deed, Billingsley obtained a judgment against him for a debt for an amount over four hundred dollars; had the land levied on as Ellis’s property, and bought it at the sheriff’s sale without any notice of the lien secured by the note of Singletary, on which this action is brought; after which Ellis got a conveyance of the land *40 through his agents, Jagers, Byrd & Co., for an amount something over two hundred dollars.

It is contended by Singletary that as Billingsley was a judgment creditor, and had his hid for the land credited on his judgment, thereby giving no other consideration for the land than his antecedent debt,.embodied in his judgment, he did not stand in the position of a bona fide purchaser for a valuable consideration, as against this lien, of which he had no notice.

The reason of this rule is said to be, that “the judgment creditor shall be deemed entitled merely to the same rights as the debtor had, as he comes in under him, and not through him; and upon no new consideration, like a purchaser.” (Burgh v. Burgh, Rep. Temp. finch, 28; see note 2, Story’s Eq. Jur., sec. 410, p. 388, Redfield edition.) This principle, however, is strongly combated in the case of Bayley v. Green-leaf, (1 Wheaton U. S. Rep., 46,) where it is attempted to be shown to be applicable to bankrupt creditors and the like, and not to creditors generally, who have obtained judgments and become purchasers under them; for otherwise their judgment liens would avail them nothing. This is referred to with approbation by Chancellor Kent, as entitled to general assent. (4 Kent’s Comm., 154.)

It does not follow from this principle, however, that Ellis is in a position to protect himself, as Billingsley might have done; for he sold the laud to Kirksey, and traded one of the purchase-money notes to Ilogue, and he assigned it to Robinson, Singletary & Co., who took in exchange for it Holliman’s note, now sued on, the lien being preserved all along, and Ellis was proved to be cognizant of the facts pertaining to it; and having, with such notice, obtained the title to the land from Billingsley, he seeks thereby to defeat the lien of the note that he put in circulation, and for which he obtained a full consideration.

Mr. Story, after stating the rule that one who has notice, deriving title through one who had no notice, is thereby *41 protected in Ms right, proceeds to say: “It is wholly immaterial what the equity is, whether it is a lien or an incumbrance, or a trust,- or any other claim; for a bona file purchase of an estate for a valuable consideration purges the eqmty away from the estate from all persons who may derive title under it, with the exception of the original party, whose conscience stands bound by the violation of his trust and meditated fraud; but if the estate becomes revested in him, the original equity will reattach to it in his hands.” (1 Story’s Eq., 420, p. 388, Red. ed., referring to Burgh v. Burgh, Rep. Temp. Finch, 28; Kennedy v. Daily, 1 Schr. & Lefr., 379, and other cases.)

This exception to a general rule seems to be peculiarly applicable to this case, as it is established by the evidence and as it is confirmed by the verdict, as it prevents one from defeating a claim, held by another upon a valuable consideration, obtained in good faith m the comse of trade, for wMch he has received full value when he put it in circulation, and had full notice that it was in the hands of plaintiff when he obtained the title from Billingsley, by paying money for it, which simply discharged a debt wMch he was hound to pay at all events.

The questions discussed embrace, as it is believed, all the matters complained of that are thought to require a serious consideration; and although it might have been more satisfactory if the case could have been shaped and conducted so as to have settled and adjusted the equities of the respective parties, still, as the case is presented in the record, we do not conceive that there is any material error, requiring a reversal 'of the judgment, and therefore it is affirmed.

There was a difference in the amounts of the two notes exchanged : one for §1,250, and the other for §1,312.50, which, had it been of any importance in evidencing a release of the lien, might have been explained more fully by Hogue, who seems to have falten some part in each and all of the transactions involved in this suit.