Case Name: A. W. Morton v. A. M. K. Lowell
Court: Supreme Court of Texas
Jurisdiction: Texas
Decision Date: 1882-04-11
Citations: 56 Tex. 643
Docket Number: Case No. 4570
Parties: A. W. Morton v. A. M. K. Lowell.
Judges: 
Reporter: Texas Reports
Volume: 56
Pages: 643–647

Head Matter:
A. W. Morton v. A. M. K. Lowell.
(Case No. 4570.)
1. Sureties on claim bond — Bona fide purchasers.— The defendant in the trial of the right of property made a trust deed to certain land to his sureties on the claim bond, empowering the sale of the land in case he should fail to pay off or otherwise satisfy the bond at its maturity. Held,
(1) When judgment was rendered against him and he faded to satisfy the bond, the contingency which authorized the sale of the land had happened.
(2) Parties claiming under a superior outstanding title on the ground of want of notice of the trust, must, in order to defeat the trust deed, show themselves to have been bona fide purchasers without notice and for valuable consideration paid before such notice.
(3) Where the evidence was that part of the consideration was paid before notice of the trust, but the amount so paid was not shown, it is insufficient to establish the defense of bona fide purchasers without notice.
Appeal from Dallas. Tried below before the Hon. Geo. N. Aldredge.
D. M. Payne and Stemmons & Field, for appellant.
I. The court erred in finding for plaintiff when there was no evidence showing that Paschal and Cumly had ever been required to pay anything on account of the claimant’s bond.
II. The court erred in finding for plaintiff herein, lie-cause defendant showed a superior outstanding title to the land sued for in J. W. Payne and D. A. Williams. Styles v. Gray, 10 Tex., 584; Burleson v. Burleson, Tex., 412; Ballard v. Perry, 28 Tex., 361; Riddle v. erstaff, 51 Tex., 155; Keyes v. H. & G. N. R. R. Co., 50 Tex., 169.
W. L. Williams and Wellborn, Leake & Henry, for appellee.

Opinion:
Bonner, Associate Justice.
The first and second assigned errors present substantially the same question, that it does not appear that Paschal and Cumly had ever paid anything on the claim bond of John Gilroy, upon which they were his sureties; and that, therefore, there had not been such breach of the conditions of the trust deed, given by Gilroy to indemnify them, to authorize the sale under which appellee Lowell claims title to the land in controversy.
The claim bond was conditioned substantially that Gilroy would pay off or otherwise satisfy the same at its maturity, and, on failure to do so, that the land should be sold by the trustee, the proceeds to be applied to the payment of the bond. Judgment was rendered against Gilroy in the suit for the trial of the right of property, and the bond subsequently declared forfeited, which, under the statute, had the force and effect of a judgment against him and his sureties, Paschal and Oumly. Pasch. Dig., art. 5816.
In Pope v. Hays, Ch. J. Hemphill, in passing upon a similar question, says: " The question of what should be regarded as breaches of bonds of indemnity was fully considered in the case of Rockfeller v. Donnelly, 8 Cow., 628, and in Chace v. Hinman, 8 Wend., 452. In the former case the chancellor expressed his view of the rule in such cases as follows, viz.: That when the obligation is to indemnify against damages or expenses, and the obligee has become absolutely bound and liable to pay the damage incurred by the charge, and his demand against, his obligor upon the bond of indemnity, by reason of the charge against himself, is reduced to a certainty, it would surely be just and reasonable, and would violate no principle of law, to permit him to enforce his own demand against the obligor in the first instance, and before he satisfies the charge against himself. It is an operation which avoids circuity, and essentially subserves the pur poses of justice and equity, by enabling him who is entitled to the indemnity to obtain the means to satisfy the charge he has incurred from the party who ought to bear it, and thereby save himself the necessity of an advance and payment out of his own funds and estate, which might be inconvenient, and perhaps involve him in serious embarrassments.
"That this proposition is equitable and just, that it would save the party exposed to injury, and could do no wrong to the one in default, must strike the mind of every one with a force that cannot be resisted. It harmonizes also with the jurisprudence and procedure in this state, which avoids circuity in principle and in proceedings, and which, by a species of preventive justice, shields the innocent against losses which must, in all probability, accrue, and will not delay until the wrong is done and then deal out a scanty relief by way of compensation." Pope v. Hays, 19 Tex., 378.
We think the authority and reasoning of that case decisive of the one under consideration, and that the contingency had happened which authorized the sale under the trust deed under which appellee Lowell claims title. March v. Hubbard, 50 Tex., 207.
The only other alleged error relied on by the appellant is the eighth, that the court erred in finding for the plaintiff Lowell, because defendant Morton showed a superior outstanding title to the lands sued for in Payne and Williams.
The deed from Gilroy to Payne and Williams was not strictly a superior outstanding title as that phrase is usually understood, but a junior title in them, alleged to be superior for want of notice, actual or constructive, of the prior trust deed under which Lowell claims title. To defeat this trust deed Payne and Williams must not only have been bona fide purchasers without notice, but for a valuable consideration paid before such notice; and the burden of proof devolved upon Morton to show these facts. By the testimony of these parties themselves it appears that the consideration of their deed was for less than recited therein, and also that it was both for services already rendered and those subsequently to be rendered. It does not appear what proportion of these services were rendered before actual notice by them of the trust deed, and what proportion afterwards. Under well established principles of equity they could not claim to have been bona fide purchasers for value for so much of the services as were rendered after such actual, notice, and it devolved upon Morton to show clearly that a valuable consideration had been paid.
Again, the testimony not only fails to show that the rights of Payne and Williams in regard to their antecedent services were changed or prejudiced by taking the deed from Gilroy, but on the contrary it does affirmatively appear that they subsequently did not respect this deed as a payment therefor, but prosecuted their claims, both for the antecedent as well as for the subsequent services, to judgment against Gilroy.
We are of opinion that this ground of defense was not sustained by the testimony, and that the eighth assigned error was not well taken.
This view of the case dispenses with the necessity of deciding the question raised by the assignment of error on the part of the appellee, that the court erred in holding that the record of the trust deed was not constructive notice, because the acknowledgment upon which this record was made was taken by Lanier as a notary public, when he appeared upon the face of the deed to be empowered, in a certain contingency (and which in fact happened), to act as substituted trustee in the sale of the land.
That such acknowledgment, if taken by the trustee primarily empowered to act, would vitiate the record, has been expressly decided. Brown v. Moore, 38 Tex., 645; Sample v. Irwin, 45 Tex., 573; Stevens v. Hampton, 46 Mo., 404.
[Opinion delivered April 11, 1882.]
Ho opinion is now expressed whether the same principle would not apply to a substituted trustee when he appears as such on the face of the deed.
There being no apparent error in the judgment below, the same is affirmed.
Affirmed.