Court Opinion

ID: 9764414
Source: CourtListenerOpinion
Date Created: 2023-08-29 03:21:07.044431+00
Date Added: 2024-06-11T07:29:56.323549
License: Public Domain

MR. JUSTICE NORVELL,
joined by JUSTICES SMITH and HAMILTON, dissenting.
The holding of the Court which likens a private “rescission” of a vendor’s lien agreement to a court foreclosure represents an extension of the doctrine of extra-judicial vendor’s lien “rescissions” or foreclosures. I would not extend the rule of Revard v. Wood, Tex. Civ. App., 156 S.W. 2d 561 so as to cover cases such as the present one. We should, insofar as compatible with precedent, insist that titles to real property be evidenced by written instruments or legal proceedings which are definite and certain. The rule, applicable to judicial foreclosures, that a subvendee is not a necessary party to a suit, but his rights are not extinguished if he is not made a party thereto generally presents the further question of when and under what conditions are the rights of the subvendee finally terminated. This often calls for another suit and generally as a practical matter it would *419have been more expeditious to have made the subvendee a party to the original suit. Why then import this rather uncertain and archaic way of doing things into the field of private “rescissions”?
I agree with the petitioner who asserts that for one of these private “rescissions”, such as we have in this case, to be effective as to a subvendee, it is essential that such subvendee have notice thereof. Our recording acts do not purport to charge one with notice of instruments filed subsequent to the time his deed is placed of record. Article 6631, Vernon’s Ann. Tex. Stats., White v. McGregor, 92 Tex. 556, 50 S.W. 564; Wests’ Heirs v. Vick, Tex. Civ. App., 203 S.W. 63, wr. dism. The only constructive notice chargeable to Whiteside here is the existence of the lien against the property when he acquired his mineral interest therein. He is not charged with notice that his grantor had failed to pay the debt secured by the lien and entered into an agreement with the holder thereof whereby he conveyed the property, including an undivided one half mineral interest which he did not then own, to the lien holder in settlement of the debt and lien. It is conceded that Whiteside had no actual notice of the private “rescission” between Webster and Spann. White-side’s interest being a mineral interest, he had no right to the surface (other than the part thereof that might be necessary to the development of such mineral estate) ; consequently from his standpoint a change in surface possession in itself could not be notice to him of the assertion of the paramount legal title.
This presents the question of whether or not any notice was necessary to lend efficacy to the Webster-Spann transaction insofar as terminating Whiteside’s mineral interest was concerned.
In Phillips v. Herndon, 78 Tex. 378, 14 S.W. 857 it was said that:
“Herndon (the vendor) having received from Moseley at least a part of the purchase money for the lands, and Moseley having taken possession under his contracts of purchase, Herndon could not rescind the sales to him without notice of his intention to do so; * * *. At the time Herndon attempted to rescind the sales to Moseley, after the death of both Moseley and his wife, there was no one to whom notice of his intention to rescind could be given, and there was therefore no rescission effected.”
*420In Huffman v. Mulkey, 78 Tex. 556, 14 S.W. 1029, it was said:
“The right of a vendor, who has conveyed land through a deed on its face reserving a lien for purchase money, to rescind, is not an absolute right, even in cases in which the purchase money has become due and remained unpaid, as may be seen by an examination of the many cases decided by this court. The right of the vendor to rescind, in such cases, does not exist at all until the vendee has failed to pay purchase money in accordance with the contract, and one to whom a vendee has conveyed is entitled to all the rights of his vendor, which cannot be affected by any transaction between the original vendor and his vendee after the latter has parted with his interest in the land.”
To my mind, these authorities support the proposition that notice to the subvendee is necessary. While agreements whereby a vendee reconveys lands to a vendor in settlement of an indebtedness are commonly spoken of as “rescissions,” this term may be somewhat misleading when the rights of a subvendee are involved. The transaction certainly is not a bilateral rescission. Spann’s action could in no way divest Whiteside of the mineral interest which he, Spann, had conveyed away. The WebsterSpann transaction insofar as Whiteside is concerned must be viewed as a unilateral one because Webster was the only one who possessed the title and right to terminate Whiteside’s interest in the property. If we consider Webster’s acceptance of the deed from Spann as a species of foreclosure or the assertion of a paramount title by Webster, the fact remains that at that time Whiteside had equities in the property and was entitled to notice of Webster’s action. Whiteside had the right to pay the purchase money debt secured by the lien and thus protect his mineral interest. He also had the right to demand that that portion of the property retained by Spann, after his conveyance to Whiteside’s predecessor in title, be first applied to the discharge of the Webster indebtedness before his mineral interest be taken. Application of portions of land originally sold as a unit to the discharge of an indebtedness in the inverse order of alienation is a familiar example of resort to the doctrine of the marshalling of assets. If notice to the original vendee is essential to the exercise of one of these unilateral rescissions, then why should not notice to a subvendee having substantial interests in the property be also required? If it should be suggested that this rule would severely burden a *421vendor by requiring him to notify subvendees of his intention to assert his paramount title, I would point out that after all the years of Texas experience with vendor’s liens, this is seemingly the first case wherein in the absence of notice, the rights of a subvendee have been effectively cut off by a private “rescission” between the vendor and the original vendee. The opinion of the Court does not rest upon any decided case so holding but rather upon an analogy between the type of transaction we have here and the judicial foreclosure considered in Revard v. Wood, Tex. Civ. App., 156 S.W. 2d 561.
Neither the rule of stare decisis nor the rule of precedent requires the acceptance of arguments based upon analogies which would extend a rule or doctrine of law to new factual situations when unfavorable or in just results may be foreseen as resulting from such extension. McMahon v. Christmann, 157 Tex. 403, 303 S.W. 2d 341.
The question of laches actually raises the question of notice in another form. If the vendor is under no duty to notify the subvendee of the assertion of his paramount title, then I would readily concede that Whiteside, in order to protect his equity, would have to act with reasonable promptness. But if the law requires notice to a subvendee (as I believe it does) before his rights may be terminated by a private agreement between the vendor and the original vendee, then a different situation is presented. Lands, and particularly mineral estates therein, are often held for long periods of time for investment and speculative purposes and I would be most hesitant to rely upon the uncertain and often complicated doctrine of laches to effect the evaporation of a land title or interest in land which had vested in accordance with a duly recorded written instrument. I would not apply it in this case because there is no element of estoppel present which would or should bar Whiteside’s request for relief under the doctrine of marshalling of assets.
Upon authority of Culver v. Pickens, 142 Tex. 87, 176 S.W. 2d 167, it was said in Pearson v. American Fidelity & Casualty Co., Tex. Civ. App., 321 S.W. 2d 620, 622, ref. n.r.e., that:
“In considering the question of laches and/or stale demand, the facts of each case must be considered. A stale demand or claim is one that has for a long time remained unasserted, one that is first asserted after unexplained delay of such great length as to render it difficult or impossible for the court to ascertain truth of matters in controversy and *422do justice between the parties, or as to create presumption against existence or validity of claim, or presumption that it has been abandoned or satisfied. Laches is not merely delay in bringing an action, but each (sic) delay working disadvantage to another, and operates as estoppel against assertion of a right only when a party, knowing his rights, takes no steps to enforce them until condition of other party has, in good faith, become so changed that he cannot be restored to former state.”
To my mind, if it be conceded that notice to subvendee should have been given, petitioner’s argument on the laches question is not answered by saying that the land has increased in value since the private rescission between Webster and Spann. At that time, all Webster was entitled to was the payment of the remainder of the purchase price agreed upon; a substantial portion thereof having already been paid. If he wanted to acquire the subvendee’s interest, he should have given such vendee an opportunity to protect himself by demanding a marshalling of assets. The rule adopted by the Court allows a vendor to effect a private rescission with the original vendee without the knowledge of the subvendee in the hope that the subvendee will not learn of the transaction until too late to protect himself. A device is approved whereby parties are allowed to legally act in a fashion so as to bring about results which may not meet the accepted standards of fairness and equity. Whether such is the result in this case is rather beside the point insofar as the effect of the Court’s decision as a precedent is concerned. The way is left open if not pointed out.
To sum up, I simply would not recognize the private “rescission” of the vendor and the original vendee without notice to the subvendee as being effective as to the subvendee’s rights. The private rescission is a device which has seldom been employed heretofore if the decided appellate cases constitute any indication. Its recognition as valid by this Court could cause some mischief and create uncertainty in land titles. The far better rule would be one requiring the vendor to give notice to the subvendee before his unilateral rescission can be effective as to the subvendee. Less hardship and firmer land titles will be engendered by this course, which in my opinion is clearly indicated by Phillips v. Herndon, 78 Tex. 378, 14 S.W. 857 and Huffman v. Mulkey, 78 Tex. 556, 14 S.W. 102.
Being unable to concur in the Court’s order of affirmance, I respectfully dissent.