Court Opinion

ID: 3979538
Source: CourtListenerOpinion
Date Created: 2016-07-06 10:36:39.014701+00
Date Added: 2024-06-11T13:35:58.071095
License: Public Domain

The plaintiffs in error alleged:
"That at the time it was understood and agreed between the parties, grantors and grantee, that the said F. P. Jones was to hold said land in trust for the benefit of the said Tornillo Camp No. 42, Woodmen of the World of El Paso, Tex., and that the said conveyance was not in fact a conveyance in fee simple of the title to the said F. P. Jones, there being in fact no real consideration paid for the said conveyance, but the said conveyance being made for the purpose of creating a trust in the said F. P. Jones and on the said date the said F. P. Jones executed an instrument recognizing the trust and agreeing to reconvey the said property to such persons as the managers, auditors and trustees, joined by the consul commander, and clerk of the said lodge or camp, should order and direct.
"Wherefore the plaintiffs allege that the said property was being held in trust by the said F. P. Jones for the benefit of the said organization."
It is apparent plaintiffs in error are claiming an equitable title to the land evidenced by a written instrument executed by Jones duly acknowledged, which created an express trust and agreement to convey.
As I understand the decisions of the Supreme Court, the rule is settled that by virtue of the registration statute (article 6824, R.S.) the lien of an attaching creditor without notice is superior to the title created by an unrecorded instrument of this nature executed by the judgment debtor.
So far as I am aware, the right of such a creditor has never been subordinated to that of persons claiming under the debtor by unrecorded written evidence of title. It has, however, been often held that a superior right or title of third persons arising by operation of law, or which validly rests in parol, are not susceptible of registration, and therefore not within the purview of the act and not affected thereby.
In Grace v. Wade, 45 Tex. 522, it is said:
"It is well settled that the lien acquired by a judgment or levy of an execution by the common law, extends to and binds only such title or interest as the debtor has in the land at the date of the judgment or levy of the execution under which the lien is claimed, and that the *Page 685 
equitable rights of third persons will be upheld against the legal lien of the debtor. * * *
"But the rights of the lien creditor, and of third parties claiming by unrecorded conveyances, are not to be determined with us by the common law, but by the statute changing and modifying, and to some extent, at least, entirely abrogating the common-law rule in such case.
"In Blankenship v. Douglas the distinction between the common-law lien and that given by our registration statutes, or in other words, when a third party asserts against a creditor or purchaser under his judgment a title or interest to which the registration laws do or do not apply, is fully and clearly recognized. Indeed the judgment is rested directly on this distinction. The court expressly says that the lien of the judgment would have prevailed over an unregistered deed from the defendant. But inasmuch as Blankenship claimed an equitable estate not within the contemplation of the registration laws, and therefore not affected by them, it held his equitable title not within the lien of the judgment."
In Catlin v. Bennatt, 47 Tex. 165, it is said:
"A vendor of lands, who has executed his bond for title, on payment of the purchase-money, has placed the purchaser in possession, and has transferred or collected the notes for the purchase money, retains the legal title simply as trustee, and has no interest in the land subject to execution. His creditor, who attaches land in this condition, in which, in fact, the debtor has no interest, acquires no lien, unless it be by virtue of the registration laws. (Blankenship v. Douglas, 26 Tex. 228; Freem. on Judg. § 366.) By that law, unless title bonds are recorded, they are void as to creditors of the vendor who acquire liens without notice, and as to subsequent purchasers without notice. (Paschal's Dig. arts. 4988, 4989; Grace v. Wade, 45 Tex. 522.)"
In Senter v. Lambeth, 59 Tex. 259, it is said:
"The sole question in the case is whether, under the admitted facts, the lien and rights acquired by virtue of the writ of attachment, judgment and sheriff's sale are superior to those of appellees, who hold the unrecorded vendor's lien, of which appellants had notice at or before the sale, but of which no notice was had when the writ of attachment was levied or when the judgment was obtained.
"The evidence of the vendor's lien in this case was not recorded, nor was it, in the form in which it existed (being the lien springing by operation of law out of the transaction between the parties), susceptible of registration. Let us examine in this connection some of the adjudged cases in which the effect of this want of registration has been considered. * * * [Here follows review of some cases.]
"These decisions only apply to cases where the third party to be affected by the unrecorded conveyance acquired thereby the legal title; or where his right or interest is represented by some written instrument, that is required or permitted by law to be recorded, and which he has neglected to record, and of which the judgment creditor had no actual notice at the date of the acquisition of his lien.
"This court has never held that the doctrines above announced applied to cases where the rights of a third party, as in this case, for example, claiming through or under the judgment debtor, were purely equitable in their character, and which were not in their nature susceptible of registration, when actual notice of such equitable title was brought home to the purchaser before the sale and purchase. * * *
"We are of opinion, in accordance with these views, that the vendor's lien, which, as we have said, springs out of the nature and character of the transaction between the parties, and originating and existing wholly independent of any contract of any kind whatever, verbal or written between the parties, is that character of equitable claim which is beyond the contemplation of our statutes of registration."
The majority opinion says that the instrument signed by Jones is not a conveyance, but a mere declaration of trust, and is not such an instrument as the registration act applies to. It is an express declaration of trust and agreement to convey and, in my opinion, within the purview of the statute. Catlin v. Bennatt; Senter v. Lambeth.
But it is not necessary, after all, to refer to the above cases for guidance in the decision of this case, for it is ruled by the decision in the parallel case of Stephens v. Keating, 17 S.W. 37, by the former Commission of Appeals, whose opinion was adopted by the Supreme Court. This quotation is from the syllabus of the case:
"Under Rev.St. Tex. art. 4332, which provides that all deeds of trust and mortgages shall be void as to all creditors and subsequent purchasers for a valuable consideration without notice, unless recorded as required by law, a written agreement by a grantee of land to reconvey on certain conditions, which agreement was not filed for record, does not affect a lien acquired by levy, by a judgment creditor against the holder of the legal title without notice of such agreement. * * *"
In the course of the opinion it was said:
"If we treat the two instruments, the deed and the obligation to reconvey, as contemporaneous, the transaction between Mrs. Miller and husband and George W. Stephens had the effect to invest Stephens with the legal title to the land charged with the trust expressed in the obligation to reconvey. We think that the instruments were contemporaneous, and are to be construed together, as affecting the rights of Mrs. Miller and Stephens between themselves. An express trust was created. It was not a resulting trust, notice of which could not be given under the registration laws, but it was fully defined in an instrument independent of the deed creating an obligation to reconvey, which Stephens executed to Mrs. Miller and her husband. It was such an instrument as could have been recorded, and notice thereof given. By the levy of his execution of the land, Brown and wife, the judgment creditors, acquired a lien thereon without notice of the trust upon which Stephens held it. When a third party asserts against a creditor or *Page 686 
purchaser under his judgment a title or interest to which the registration laws do not apply, then, in such case, notice of such title or interest at the sale will be sufficient, and no lien attaches to the land in favor of the creditor or purchaser by reason of the record of the judgment or the levy of an execution. Ross v. Kornrumpf, 64 Tex. 394; McKamey v. Thorp, 61 Tex. 650; Parker v. Coop, 60 Tex. 116; Blankenship v. Douglas,26 Tex. 226. But when a third party asserts against a creditor or purchaser under his judgment, a title or interest to which the registration laws do apply, the common-law rule is changed, and a purchaser for a valuable consideration will not be affected with notice if the creditor had none when his lien was fixed, and will take a good title whether he have knowledge of the unrecorded instrument at the time of the purchase or not. Rev.St. art. 4332; Grimes v. Hobson, 46 Tex. 416; Grace v. Wade, 45 Tex. 524. Mrs. Miller invested George W. Stephens with the legal title to the land, so far as third persons were concerned, the reservation of the vendor's lien in the deed not having the effect to reserve the legal title except as between the parties themselves and those asserting the lien. Stephens' deed was recorded, and he appeared as the owner of the legal title. He executed to Mrs. Miller and her husband an instrument affecting the title, which was an agreement to reconvey the land upon certain conditions. The instrument was signed by Stephens, and its execution was witnessed by two witnesses, but it was never proved up for record, and was never recorded. It was withheld from record until the lien created by the levy of the execution of the judgment creditor, Brown, intervened, and Mrs. Miller and her husband cannot now set up a trust defined in an instrument that might have been recorded, in order to defeat a recovery of the land by a purchaser of the property without notice of the claim, when the lien of the judgment was fixed by the levy of the execution."
This decision has never been overruled and Is binding upon this court.
Being of the opinion that the ruling of the majority is not in harmony with the construction heretofore given to the registration act by the Supreme Court in various decisions and that it is in direct conflict with Stephens v. Keating, I respectfully dissent and enter same of record.