Court Opinion

ID: 4893797
Source: CourtListenerOpinion
Date Created: 2021-09-02 23:54:08.721316+00
Date Added: 2024-06-11T08:11:41.727528
License: Public Domain

Bonner, Associate Justice.
We deduce from the assigned errors ' the following as the decisive questions in this case:
First. Did the United States district court, sitting in bankruptcy, have jurisdiction over the land in controversy — the same being the individual property of Enoch Jones, then deceased, so that the title passed to appellee Grenet by the sale to him made -by virtue of the judgment of that court?
Second. If not, then was Grenet such possessor of the land thereunder in good faith as would entitle him to payment for beneficial and necessary improvements and repairs made and taxes paid by him thereon?
Third. Was he entitled to have refunded the purchase money paid out by him — the same having been applied to the payment of valid judgment liens on the land, in favor of the creditors of Enoch Jones, deceased?
These questions will be considered in their order.
I. Did the bankrupt court have jurisdiction to order the sale of the land in controversy ?
That it did not has been expressly decided, and has been thus decided in a case arising under this very estate of Enoch Jones, in which it was held that the fact that his estate was being administered by independent executors under the terms of his will, which withdrew it from the control of the probate court, would not confer jurisdiction upon the bankrupt court. Adams v. Terrell, 4 Fed. Rep., 796; Frazier v. McDonald, 8 Nat. Bank. Reg., 237.
We are content to follow the decisions of the United States courts upon this question, one peculiarly within their province and jurisdiction. °
As affecting the question of title, there is a well recognized distinction between those cases of judicial sales irregularly made by virtue of a judgment which the court had jurisdiction to render, and those regularly made by virtue of a judgment which the court did not have jurisdiction to render. The former is the defective execution of a valid power, which a court of equity, in proper cases, will aid; the latter is the valid execution of a defective power, which of itself is not sufficient to pass title, though relief in some cases may be granted on other grounds, as by estoppel.
We are of opinion that the court did not err in deciding that Grenet did not acquire the title to the land by virtue of the sale under which he claims.
II. Was Grenet entitled to compensation for beneficial and necessary repairs made and taxes paid by him ?
This involves the question of improvements in good faith. Our *278statute upon this subject is but a legislative acknowledgment and regulation of that principle which it has been said “ has the highest and most persuasive equity, as well as common sense and common justice, for its foundation.”
Bright v. Boyd, 1 Story, 478, is a leading case upon this subject, and received the very full consideration and laborious research of that' eminent jurist, and the principle was traced to the Boman law, and shown to have been engrafted into the law of those nations which derived their jurisprudence from that law, and hence would be peculiarly applicable to our system. This case again came before the same learned judge, and received his more mature deliberation and approval. 2 Story, 605.
No precise rule can be laid down which will define possession in good faith in its application in all cases; but the flexible powers of a court of equity, unlike the rigid rules of the common law, will adjust themselves to the very right and justice of the'particular case.
Chief Justice Hemphill, in Sartain v. Hamilton, 12 Tex., 220, lays down the rule that possession in good faith is not restricted to cases ' where the possessor supposes himself to be the true owner and is ignorant that his title is contested by any one claiming a better right, but that he may also be a possessor in good faith who makes an innocent mistake in a point of law, as in the construction of a demise, the due execution of a power, and the like, referring to Adams’ Eq., 386; B. N. P., 88.
That in such case, however, the purchaser must have reasonable and strong grounds to believe in the validity of his own title.
Chief Justice Wheeler, in the subsequent case of Dorn v. Dunham, 24 Tex., 380, says that the above is perhaps as accurate an expres- ' sion of the meaning of good faith in this connection as can be given; ' and lays this down as the principal test — that the possessor must have reasonable ground to believe that he is himself the true owner of the land.
The definition contained in these cases has been repeatedly acted upon by the courts of this state.
In Hill v. Spear, 48 Tex., 583, although, under a familiar rule, the purchaser was charged with notice of defects upon the face of his title, the defect in that case being the want of the privy acknowledgment of a married woman sufficient to pass the title, and which in many cases has been held would constitute but a void title, yet it was there decided that the purchaser’s knowledge of the defect was not inconsistent with that good faith which would entitle him to payment for his improvements.
It is true that there are other cases in which the general proposi*279tion has been announced, that a void title will not support a claim to possession in good faith; but it is believed that they will generally be found, as in Miller v. Bronson, 50 Tex., 597, to be cases in which the invalidity of the title was clearly evident, and not those in which to all external appearance the title was good, and derived through the judgment of a court of general jurisdiction. Other of these cases, as Pitts v. Booth, 15 Tex., 453; Upshur v. Pace, id., 531, arose upon tax titles, a class mi generis, generally without meritorious consideration, and which has invariably been strictly construed, and besides, were based upon the preceding case of Robson v. Osborn, 13 Tex., 298, in regard to which Chief Justice Wheeler, in Dorn v. Dunham, 24 Tex., 380, says that he has since its decision had reason to doubt its correctness, and deemed it proper to express that doubt, in order that it might not be thought to conclude the question in any case in which it might thereafter arise.
Want of jurisdiction does not necessarily, in every case, imply want of good faith.
The question whether the title itself will pass by the simple act of sale made by decree of a court which did not have jurisdiction, is a very different one from that whether a purchase and possession by virtue of such sale may not, under some circumstances, be made and held in good faith.
Admitting that, in a case where the court did not have jurisdiction, the sale made under its judgment would not pass the title for want of power, and that to this extent the purchaser is held chargeable with notice of want of jurisdiction, yet if made as in this case, under decree of a court of general jurisdiction, in the apparent regular exercise of its powers, when that jurisdiction does not seem to have been questioned by the learned judge presiding and eminent counsel engaged in the cause, when the sale was apparently fairly made- and for a valuable consideration, when the possession was delivered thereunder, and retained with all the usual indicia of ownership, without objection, for years, we are of opinion that it would constitute such good faith, though the mistake was technically one of law, as would come within the definition of Chief Justice Hemphill in the above case of Sartain v. Hamilton.
In such case, the question is not whether a mistake of law shall vest title, but whether the penalty for that mistake, however innocently made and however diligently guarded against, shall be the forfeiture for a claim for improvements which enhanced the value of that property. To so decide would palpably violate that maxim, founded in the highest natural equity, that no one should be made richer to the damage and wrong of another.
*280The improvements in this case seem to have consisted of necessary and beneficial repairs.
This character of improvements pertains to the very preservation of the property itself, and without which the plaintiffs would have suffered positive loss; and for which, according to some authorities, even a possessor in bad faith would be entitled to compensation.
Payment for necessary and beneficial repairs stand upon a higher equity than for those for purposes of mere ornament, and upon higher equity even than new and additional improvements not necessary for the preservation of the property itself,, but which simply enhance its valúe; and this was the doctrine of the civil law. Saunders v. Wilson, 19 Tex., 194; id., 201; Bright v. Boyd, 1 Story, 478; 2 Story’s Eq. Jur., § 1237 and. note.
Under the circumstances of this case, we do not think that the court below erred in allowing Grenet compensation for the improvements and repairs made on the property. Neither, upon the same principle, do we think there was error in allowing him for the taxes paid. These were valid charges against the property, the failure to pay which may have caused its sale and sacrifice.
III. Was Grenet entitled to have the purchase money paid out by him refunded ?
The same general principles of equity which authorize payment for improvements in good faith have been repeatedly applied to the restitution of the purchase money of property bought at void judicial sales, when the money, as in this instance, has been applied to the payment of a valid incumbrance against the property thus sold.
In the above cited case of Bright v. Boyd, Judge Story says: “ It cannot be overlooked that the lands of the testator, now in controversy, were sold for the payment of his just debts, under the authority of law, although the authority was not regularly executed by the administrator in his mode of sale, by a non-compliance with one of the prerequisites. It was not, therefore, in a just sense, a tortious sale; and the proceeds thereof, paid by the purchaser, have gone to discharge the debts of the testator, and so far the lands in the hands of the defendant (Boyd) have been relieved from a charge to which they were liable by law. So that he is now enjoying the lands free from a charge which, in conscience and equity, he, and he only, and not the purchaser, ought to bear. To the extent of the charge from which he has been thus relieved by the purchaser, it seems to me that plaintiff, claiming under the purchaser, is entitled to reimbursement, in order to avoid a circuity of action, to get back the money from the administrator, and then subject the lands to a new sale, or at least in his favor, in equity to the old *281charge. I confess myself to be unwilling to resort to such a circuity in order to do justice, where, upon the principles of equity, the merits of the case can be reached by affecting the lands directly with a charge to which they are ex cequo et bono, in the hands of the present defendant, clearly liable.” 2 Story, 498.
In Valle v. Fleming’s Heirs, in which the proceeds of a void administration sale had been applied to the payment of an existing mortgage on the land sold, it is said: “ Nothing would be more unjust, we may repeat, than to permit a person to sell a tract of land and take the purchase money, and then, because the sale happens to be informal and void, to allow him, or, which is the same thing, his heir, to recover back the land and keep the money. Any code of law which would tolerate this would seem to be liable to the reproach of being a very imperfect or a very inequitable one. We think that, upon well established principles of equity law, the owner of the land should, if he wishes to get it back, repay the purchase money which he has received, or which he will receive if he gets the land. . . . But whether this equity be administered under the name of compensation, or by substituting the purchaser in the place of the creditors whose debts he has paid, or by giving him the benefit of the mortgage which his money has paid off, is not material.” 29 Mo., 164.
To the same effect is the elaborate case of Blodgett v. Hitt, 29 Wis., 169, which cites quite a number of cases that recognize the same principle, and reviews several of them, amongst others, Hudgin v. Hudgin, 6 Gratt., 320; Dufour v. Camfranc, 41 Martin, 607 (2 Cond. La. R., 243); McLaughlin v. Daniel, 8 Dana, 182.
In the above case of Hudgin v. Hudgin, the sale was held void and not sufficient to pass the title, on the ground that the children and devisees of the deceased were not joined with the executor in the suit to establish the debt and subject the realty to sale for its payment; yet the purchaser was substituted to the rights of the creditor whose debt had been paid with the proceeds of the sale, and the land held to be charged therewith.
Many cases on this subject are collected and commented on in Freeman on Void Judicial Sales, §§ 50-1, and notes.
The same principle has been repeatedly held by this court. Howard v. North, 5 Tex., 316; Teas v. McDaniel, 13 Tex., 357; Brown v. Lane, 19 Tex., 207; Morton v. Welborn, 21 Tex., 772; Andrews v. Richardson, id., 296; Johnson v. Caldwell, 38 Tex., 219; Walker v. Lawler, 45 Tex., 532.
It is contended by the learned counsel for appellants, that the re*282ported cases on this subject are those in which the invalidity of the sale did not arise from want of jurisdiction in the court which ordered it, but from some irregularity in the sale itself.
If the demand for which the property was ordered to be sold was sought to be established, in the first instance, by the judgment of a court which did not have jurisdiction, then we would have no ■hesitancy in deciding that the alleged debtor whose property had been sold thereunder should not be required to refund the purchase money. Such was the case of Steagall v. Huff, 54 Tex., 193. To hold otherwise would be to establish, without due process of law, a demand against a party, sell his property for its payment,1 and then to refuse him restitution unless he should refund the purchase money. This would virtually compel him to pay a demand which had no validity in law or equity, and may never have had any existence in fact.
The present, however, is a very different case. The land in controversy descended to the plaintiffs, charged in equity and by the express terms of our statute, with the payment of the debts for which it was sold. These debts had been merged into valid and subsisting legal judgments in a court of competent jurisdiction, which were a lien upon the property at the time of sale, and to extinguish which the proceeds of the sale were applied. The defect in the proceedings did not arise from want of validity in the debts themselves, or want of jurisdiction in the court which established them, but in the means or instrumentality by which the payment of the same was enforced.
As thus considered, we cannot perceive on principle any substantial difference between this case and those above cited, in which restitution of the purchase money was required as a condition precedent to the recovery of the property, to free which from incumbrance that very purchase money was applied.
Judgment affirmed.
[Opinion delivered May 20, 1881.]