Court Opinion

ID: 3932542
Source: CourtListenerOpinion
Date Created: 2016-07-06 09:57:36.324312+00
Date Added: 2024-06-11T14:16:47.922287
License: Public Domain

On Motion for Rehearing.
We have carefully examined the motion for rehearing of appellant, who was referred to as defendant throughout our original opinion. We now find it convenient on motion for rehearing to refer to appellant, as appellant. As appellant, under the ruling made in our original opinion, represents its successors in interest, such interest will be referred to as belonging to appellant, even though at the times referred to such interest may have passed to appellant's successor in interest, in this opinion.
We remain unable to see how the recitals, contained in the four trustee's deeds executed by the substitute trustee, can, under the facts of this case, be taken as establishing the legality of the trustee's sales, prima facie. The deeds of trust did not purport to authorize the appointment of, or after appointment to empower, R. J. James, or any other substitute trustee, to sell out the property, except upon the contingency of the inability, refusal, or failure of the original trustee to act, after being called on. The attempted appointment of James to act as substitute trustee was not even recited in the trustee's deeds to have been made upon the inability, refusal, or failure of the trustee to act, but the statement, to the contrary, was that the original trustee had been removed. And since the recitals in the trustee's deeds did not establish, even prima facie, the appointment of R. J. James as substitute trustee, the provisions in the deeds of trust to the effect that the recitals in the conveyance made to the purchaser, either by the trustee or substitute trustee, shall be proof of the matters therein stated, etc., were not shown, even prima facie, to apply to any conveyance made by James, who was only recited to have been appointed on removal of the original trustee. That is to say, before it can be contended that the recitals in the trustee's deeds should be given the effect contemplated in the deeds of trust with respect to deeds executed by a duly appointed substitute trustee, such trustee's deeds would at least have to make out a prima facie valid appointment of a substitute trustee.
We also fail to see why it was not competent for appellee to attack the validity of the trustee's deeds, notwithstanding the absence of any pleading on his part assailing them. Appellant itself tendered them in evidence, as being valid conveyances, without having pleaded them. They were offered in evidence as links in appellant's chain of title; and it was incumbent on appellant to offer them in evidence as muniments of its title, notwithstanding they were not pleaded. We cannot see why appellee should not be permitted to object to them being received in evidence, on the ground that the sales which they purport to consummate were void, and consequently were not muniments of title and afforded appellant no right of possession, without having first pleaded such invalidity. Such a right on the part of appellee is but the necessary correlative to the right of appellant, under the plea of not guilty, to offer to prove such deeds, without the necessity of having first plead them.
We have become convinced, however, that Fuller v. O'Neil, 69 Tex. 349,6 S.W. 181, 182, 5 Am. St. Rep. 59, upon the authority of which we largely based our decision of affirmance on original hearing, does not have the broad effect we ascribed to it. The Fuller Case dealt with an action of trespass to try title brought against Fuller by Mrs. O'Neil to recover a lot of ground. To her action Fuller, as defendant, simply plead a demurrer and not guilty. Then, after plaintiff had proved title in herself, defendant attempted to deraign title from her and her husband through a deed of trust given by them to one Williams, trustee, to secure a debt due from them to defendant, and a sale had thereunder, at which defendant became a purchaser. When the trustee's deed to defendant was offered in evidence, it was objected to on the grounds that it showed on its face that the trustee's deed was not made by the trustee named in the deed of trust, but by another person purporting to act as the trustee's agent, when no authority had been conferred on the trustee to delegate his powers. This objection *Page 752 
was sustained. It was held that such deed, void on its face, did not entitle defendant to possession. It does not appear from the report of the case if defendant was in possession of the property, though an action brought in trespass to try title does, of course, charge that defendant is in possession, and the plea of not guilty admits possession. But the action of trespass to try title is artificial and fictional with respect to allegations of facts, and the right to make proof of facts not pleaded. And the common practice is for an owner in possession to bring suit in trespass to try title against defendants, not in possession, to clear his title from adverse claims. But however that may have been in the Fuller Case, the defendant there took the untenable position that the legal title to the property was in Williams, the trustee; and that consequently plaintiff's remedy (her title being merely equitable) was in equity; and that she could not recover without first doing equity by tendering to defendant the debt secured by the deed of trust. It was in response to this contention that the Supreme Court (after showing that a deed of trust is a mere lien in Texas which leaves the title in the mortgagor) held: "If, however, the appellant had equities which entitled him to require the plaintiff to pay his debt before recovering the property, he should have set them up in his answer." In other words, the defendant in the O'Neil Case was seeking to assert an equity of subrogation in property that he had bought in at a void sale, under a plea of not guilty. And the court held this could not be done, which holding has been several times reaffirmed, notably in Wilkin v. Geo. W. Owens  Bros., 102 Tex. 197, 114 S.W. 104, 115 S.W. 1174, 117 S.W. 425, 132 Am. St. Rep. 867. Just why the defendant in the Fuller Case did not claim to own the debt, and the lien securing its payment, does not appear. But he assumed the position that his purchase of the property at the void trustee's sale extinguished the debt and lien. This we know, because he there contended that plaintiff was not entitled to recover because of her failure to tender him such debt, secured by a deed of trust. The court's holding, therefore, went no further than to sustain the trial court's exclusion of the deed when offered in evidence, and to hold that, in order to assert an equity of subrogation in property that had been unlawfully sold, the facts must be pleaded.
We have held in our former opinion that the proof in this case failed to prove that the trustee's deeds conveyed good title. If that is correct, appellant cannot justify its possession of the property in virtue of these deeds. However, trespass to try title is a possessory action, so, where the proof shows that a defendant in such an action is in peaceable possession of the property in litigation, and is the owner of an unpaid debt secured by a lien thereon, such defendant is entitled to retain such possession until its lien is paid. Braswell Case, cited in our former opinion. See, also, Crafts v. Daugherty, 69 Tex. 477,6 S.W. 850. The proof in this case shows that the Gulf Lumber 
Building Company bought in the property at the void trustee's sale, and further, that a month before this present suit was filed, such company, joined by the National Bond  Mortgage Corporation — the original owner of the first lien indebtedness — quitclaimed the property to appellant. So appellant thereby became vested not only with the equity of subrogation to whatever rights that remained in the National Bond  Mortgage Corporation after the void trustee's sale, but succeeded to such rights also by virtue of the quitclaim deed. Even under the doctrine of subrogation the void sales of the four lots by the substitute trustee were effective to entitle the purchaser to the debt secured by the deed of trust liens on the land, and the right to sue thereon. Howard v. Stahl, Tex.Civ.App. 211 S.W. 826, 829. See also Fox v. Kroeger, 119 Tex. 511, 35 S.W.2d 679, 681, 77 A.L.R. 663. The Fox Case is not directly in point, as it related to the situation of where a surety is compelled to pay the debt of his principal. However, there can be no difference in principle between the applicability of the doctrine of subrogation to the case of payment by a surety of a principal's obligation, and of its applicability to the case of the payment by a purchaser at a void trustee's sale of the debt secured by a lien on the land undertaken to be sold, so as to entitle such purchaser to the debt, and the lien securing its payment. The Texas rule, announced in the Fox Case, is that, "where the surety pays the debt of the principal, he has his election to either pursue his legal remedies and bring an action in assumpsit;" (or) "he can prosecute an action on the very debt itself, and in either event he stands in the shoes of the original creditor as to any securities and rights of priority." Hence, in the present case, both under the doctrine of subrogation, and by virtue of the *Page 753 
quitclaim deed from the National Bond  Mortgage Corporation, appellant became vested with the debt and the lien which secured its payment.
The action of trespass to try title being possessory, a defendant, under a plea of not guilty, is entitled to justify his possession by proof of any facts which show he has the right to remain in possession of such property. In the instant case, as appears from our former opinion, the proof shows that appellant was in peaceable and lawful possession of the property; and its possession was justified by virtue of its ownership of the unpaid indebtedness, and lien securing its payment; and it was entitled to remain in possession until such indebtedness was paid. Appellant did not require the aid of a court of equity to place it in possession; it had been placed in possession by appellee. Had appellant not been in possession, then it would have been necessary for it to have plead the facts, for in such case it would have had to invoke its equity of subrogation to entitle it to assert its lien, and its right of foreclosure; but being in possession, under proof of facts indicating such possession to be lawful so long as its lien was unsatisfied, and the action being possessory, and requiring no affirmative aid of a court of equity to award it the possession which appellee had himself given, it was entitled to maintain such possession until appellee tendered payment of its secured debt.
It is unnecessary for us to pass upon our power to reverse the judgment of the trial court because the case was tried on the theory by appellant that the trustee's deeds were valid, and by the trial court that possession by a purchaser at a void trustee's sale was necessarily unlawful. We believe that, under the plea of not guilty, appellant was entitled to the benefit of the proof that it was lawfully in possession by virtue of its lien, with the right to so remain until its debt was paid, and that appellant required no affirmative relief from a court of equity to enable it to maintain a possession which appellee himself had given appellant's predecessor in interest.
Appellant's motion for rehearing is accordingly granted, and the judgment of the trial court is reversed, and the cause remanded for a new trial.
Motion granted; cause reversed and remanded
PLEASANTS, C. J., absent.
On Appellee's Motion for Rehearing.
We have carefully examined appellee's motion for rehearing. We did not base our holding at the hearing of appellant's motion for a new trial on the fact that appellee placed appellant's predecessor in interest in possession of the property. We merely recognized and applied the rule that a defendant in trespass to try title suit can avail himself of any defense under a plea of not guilty which does not require affirmative equitable relief to make it available. The decisive point is, therefore, that appellant is in peaceable possession of the property, and has the right to retain such possession until its debt is paid. Appellee's motion for rehearing is overruled.
Appellee's motion for rehearing refused.
PLEASANTS, C. J., absent.