Court Opinion

ID: 5006434
Source: CourtListenerOpinion
Date Created: 2021-10-01 02:08:25.857668+00
Date Added: 2024-06-11T08:17:17.056339
License: Public Domain

On Motion for Rehearing.
Appellees say that they did not base the state’s liability upon a breach of the unauthorized contráct of its officers and agents to convey the land, nor upon a mere moral obligation arising from such' breach, and the authority of the Legislature to appropriate money in payment thereof. They now claim that the state’s liability arises under the common law as assumpsit for money had and received, because the state could not in equity and good conscience retain the price paid and the improvements made on the land after taking the properties back; and that the rule inhibiting officers of the state from incurring debts on its account without previous legal authority does not bar'a recovery of their claim. We do not sustain the contention for two reasons, as follows:
 1. The general rule is that: “Where a conveyance executed and delivered is defective, the purchaser’s remedy is ordinarily to have it corrected, and he cannot recover the price paid.” 66 C. J. 1470. It is only “where the purchaser has a right to rescind the conveyance and has done everything on his part necessary .to such rescission,” that he can recover the price paid and for improvements made in good faith. 66 O. J. 1506; 29 Tex. Jur. 733. Rescission alone is not sufficient to entitle the purchaser to repayment of the price paid. Such right depends upon the equities of the particular case. Lipscomb v. Fuqua, 103 Tex. 585, 131 S. W. 1061; Miller v. Horn (Tex. Civ. App.) 149 S. W. 769; Bush et al. v. Merrill et al. (Tex. Civ. App.) 156 S. W. 606; Moore v. Giesecke, 76 Tex. 545, 13 S. W. 290; Teas v. McDonald, 13 Tex. 349, 65 Am. Dec. 65; Terrill v. Dewitt, 20 Tex. 257.
In the instant case appellees’ right to rescind the conveyance was predicated solely upon the fact that two days after the Legislature adopted the resolution authorizing the Officers and agents named therein to sell the State Iron Industry, and to provide for its rehabilitation and operation, a general statute was enacted authorizing other officers of the state to appropriate a portion or all of the land in question for asylum purposes. *148But after the enactment of this statute, the Legislature from time to time by resolutions specifically recognized the contract and deed in question, and extended the time of their performance, both as to the operation of the plant and the payment of the balance due on the purchase price. Still later the state sued 'upon the last two unpaid purchase-money notes, thereby recognizing the conveyance, and throughout the proceedings in that suit insisted that the notes were valid, and that the title to the properties had passed by the contract and deed to appellees, or their pred'ecessors in title; and sought title and possession only in the event appellees succeeded in having the conveyance canceled. The state alleged in the former suit that it retained no lien upon the properties, and so recited in the contract and deed; and that its suit was upon the notes and bond given to secure them. Appellees alone insisted that the conveyance was void, and at their suit obtained judgment for cancellation of the deed and the contract and bond, thereby relieving themselves of the contract and bond obligation to rehabilitate and operate the plant for .one year as provided. They retained possession of and used the property for about eleven years, collecting the rentals, dismantling and selling parts of the plant, thereby breaching their own contract to rehabilitate and operate the industry. No officer of the state authorized to do so ever demanded possession of the premises, and ap-pellees voluntarily surrendered possession after they obtained judgment declaring the conveyance void. In the former suit appel-lees asked that the title be perfected, and such a judgment could have been rendered in the state’s suit on the notes under the undisputed evidence, and without cost to appel-lees, if they had tendered the balance due on the purchase price, which they did not do. These undisputed facts bring the case within the aforementioned general rule that, where a conveyance executed and delivered is defective, the purchaser’s remedy is to have it corrected, and he cannot recover the price paid' where he voluntarily abandons such legal remedy, and insists upon the conveyance being rescinded. And manifestly, under the facts and circumstances of the instant case, appellees did not show that their right to rescind was in accord with any applicable rule or principle of equity, which would entitle them to recover the price paid and for alleged improvements made in good faith.
2. If it be conceded that the conveyance was void as declared by the former judgment, appellees are nevertheless precluded a recovery herein under the rule that money voluntarily paid on a void demand, in absence of fraud and with full knowledge of all facts, cannot be recovered back. Appellees, or their predecessors in title, voluntarily expended all money for improvements, paid all money on purchase price and for taxes on the land conveyed without warranty, without duress, fraud, or imposition, under a mistake of law, or at least with full legal notice of the statute which appropriated the land for asylum purposes; and such moneys cannot be recovered back in any sort of suit, either at law or in equity. Gilliam v. Alford, 69 Tex. 267, 6 S. W. 757; Galveston County v. Gorham, 49 Tex. 279; Austin National Bank v. Sheppard (Tex. Com. App.) 71 S.W.(2d) 242 ; Corsicana Cotton Mills v. Sheppard (Tex. Com. App.) 71 S.W.(2d) 247. Under this rule of voluntary payment, it is also settled law that where land is conveyed without warranty, absent fraud or imposition of seller, and with full knowledge of all facts, the price paid cannot be recovered, although the conveyance be void. Pitts v. Elsler, 87 Tex. 347, 28 S. W. 518; Taylor v. Hall, 71 Tex. 216, 9 S. W. 141; Cooper v. Singleton, 19 Tex. 267, 70 Am. Dec. 333; Scott v. Slaughter, 35 Tex. Civ. App. 524, 80 S. W. 643, writ refused.
Appellees, or their predecessors in title, purchased the land and expended all money for improvements and paid all money on the purchase price or for taxes, voluntarily and after the enactment of the statutes authorizing other officers of the state to appropriate a part or all of the land in question for asylum purposes. It was a general statute, and of which appellees were required to take notice, under the rule that all persons are charged with notice of statutory law. Moreover, it is the rule that: “The powers of State officers being fixed by law, all persons dealing with such officers are charged with knowledge of the extent of their authority or power to bind the State, and are bound, at their peril, to ascertain whether the contemplated contract is within the power conferred.” 59 C. J. 173; Nichols v. State, 11 Tex. Civ. App. 327, 32 S. W. 452, writ refused. So, it is manifest that no equities arose in behalf of appellees in the premises stated. It is also manifest that since all money was voluntarily expended, or paid to the state, no common-law liability could arise against the state. Such is the holding in the recent cases of Austin National Bank v. Sheppard and Corsicana Cotton Mills v. Sheppard, supra.
*149In the Austin National Bank Case it was fceld that the common-law liability of the state arose because the unlawful tax or demand was paid under duress and protest. But in the Corsicana Cotton Mills Case it was held that the unlawful tax voluntarily paid could not be recovered, because of the constitutional provision inhibiting the appropriation of money by the Legislature, unless there is already in force a law which makes the claim a legal obligation of the state. The holding in these cases is conclusive of the instant case, because the undisputed facts show that all money sought to be recovered by appellees was voluntarily expended or paid to the state, without fraud or imposition, and with notice of all facts; and therefore no common-law liability could arise against the state.
The motion for rehearing will be overruled.