Court Opinion

ID: 9830937
Source: CourtListenerOpinion
Date Created: 2023-09-01 20:38:45.904223+00
Date Added: 2024-06-11T07:43:28.502739
License: Public Domain

On Rehearing.
In our former opinion in this case we overruled appellant’s contention that appel-lees could not be innocent purchasers because they claimed under quitclaim deeds executed by Rufus Bedford, holding that said quitclaim deeds objected to lay back of the common source under which all parties to this controversy claim, and thus could not affect the rights of appellees to claim protection as innocent purchasers, and in connection with this holding we further held that it was at least doubtful whether the substitute deed from Rufus Bedford to H. E. Keys of date September 26, 1904, should be given effect only as a quitclaim (in discussing said *645deed and the effect to be given the same the mistake in copying the habendum clause and adding a covenant of special warranty to said deed, occurred, which at this time is corrected in the original opinion). We further held in said opinion that at the time appel-lees acquired their interest in the property in controversy they had no notice, either actual or constructive, of the unrecorded chain of title under which appellant claims, and, in determining the further question as to whether appellees or either of them paid a valuable consideration within contemplation of our registration statutes for their respective interests in the property in controversy, we held that the appellee Benson paid such valuable consideration, and Was entitled to the protection of the statute, and affirmed the judgment in his favor, but held as to the appellee Freize that it appeared that the only consideration paid by him being the surrender and cancellation of a pre-existing indebtedness that the same was not valuable in contemplation of the statute and did not constitute him an innocent purchaser, and reversed and rendered the judgment of the lower court as to said appellee Freize. Both appellant and the appellee Freize have filed motions for rehearing, and, the same having been duly considered, we are of the opinion that there was no error in our opinion heretofore rendered in favor of appellee Benson, and appellant’s motion complaining of that part of our opinion affirming this case as to said appellee is therefore here overruled.
[4] Appellee Freize in his motion contends that as he, without actual or constructive notice of the prior deed to appellant, purchased from Keys (the common source) the lots in question, and paid for them by surrendering and canceling two notes for about $1,500 each, bearing 10 per cent, interest, and providing for 10 per cent, attorney’s fees, which had been executed in 1905 by Keys to appellee for a valuable consideration, and that as these notes were barred under the four-year statute of limitation in 1910, and that Freize had no notice of appellant’s prior deed until the spring of 1911, this court erred in holding that said appellee was not a bona fide purchaser for value within the meaning of our registration statute. Upon a more thorough and .extended investigation of the question here presented, we are of the opinion that we were in error in our former opinion in holding said Freize not to be an innocent purchaser, and entitled to protection of the statute as such. As to whether the discharge of an antecedent debt by a purchaser will enable him to sustain the character of a bona fide purchaser within the meaning of recording acts of this and other states and entitle him to their protection is a question on which the courts differ, and, while the weight of authority seems to be that he is not considered a bona fide purchaser for value for such purpose, the reason for. this. holding, as uniformly given in the decisions, is that the purchaser by his purchase is placed in no worse condition than he was in before, as he had parted with nothing of value, but even in jurisdictions adhering to this doctrine it is also held that, if for any reason a purchaser is placed in a worse condition than he was in before, he is entitled to the protection of the recording acts. In the editorial note, found under'the case of Western Grocery Co. v. P. B. Alleman and Wife, 27 L. R. A. (N. S.) 620, this precise question is exhaustively considered. A great many authorities are collated, and the reason for said holding is as above cited.
It is also stated that such purchaser is entitled to be protected if he surrenders any security which he formerly possessed, or if he has extended the time of the payment of the indebtedness, or if the statute of limitation has since run, and barred the indebtedness (as in the present instance), citing under this last as authority the case of Dunlap v. Green, 60 Fed. 242, 8 C. C. A. 600. It is to be observed that in the extended collation of authorities given as supporting the text of this note the editor mentions no authority contrary to the text that, if the statute of limitation has since run on the indebtedness, the purchaser who surrendered the evidences of that indebtedness will be protected, and, after extensive investigation, we have been unable to find any such contra authorities. In the case of Steffian v. Milmo National Bank, 69 Tex. 513, 6 S. W. 823, the Supreme Court of this state said: “If the law of innocent purchaser be applicable to appellee’s case, we have no doubt he must be deemed a purchaser for value. This court has held that where the consideration of a deed is an antecedent debt only, or where a mortgage is taken merely to secure indebtedness, this is not sufficient to support the claim of a bona fide purchaser for valuable consideration. McKamey v. Thorp, 61 Tex. 648; Spurlock v. Sullivan, 36 Tex. 511. There being no new consideration should the grantee or mortgagee loose the land or his lien upon it, he still has his debt; and for that reason is held to have parted with nothing of value. But should the mortgagee give time upon his debt as a consideration for the security, his case is different. By extending the time of payment he yields up, for a season, his right of action, which is a privilege deemed value in law. This is accordingly held, by the controlling weight of authority, sufficient to support the claim of an innocent purchaser. Schumpert v. Dillard, 55 Miss. 348; Port v. Embree, 54 Iowa, 14, 6 N. W. 83; Cary v. White, 52 N. Y. 138; Gilchrist v. Gough, 63 Ind. 576 [30 Am. Rep. 250]; Cook v. Parham, 63 Ala. 456; Thames v. Rembert, 63 Ala. 561.” In the present ease it would appear that by the cancellation and surrender of his notes appel-*646lee yielded up his right of action thereon for at least a season, and, if he had no knowledge of the adverse claim of appellant until his notes became barred, that he thereby lost a valuable right — that is, to sue upon an unbarred claim — and that his position was to that extent changed for the worse, in that he parted with something of value to him in giving up his right to sue and recover upon his unbarred notes, and is confronted at least by the question as to whether or not he can legally collect such notes, and as to his vendor being acquitted of the debt if he elects to plead limitation against the same, and it can hardly be held that he still has his debt as enforceable in law as when he surrendered it. As between vendor and vendee, a pre-existing debt is a valuable consideration existing until another title is shown which is better, and until that is done the vendee has a good title’. If he comes into knowledge of such adverse title while his debt exists, he has parted with nothing valuable, but, if after his right of action on said debt is impaired, it would appear that he has given up something of value, and it would seem .to us that a clear cause of action is of more value even than a mere extension of time, which is recognized by the authorities as a sufficient consideration to support a claim of innocent purchaser.
We therefore conclude that appellee’s motion for rehearing should be here granted, and that portion of our former opinion inconsistent with the conclusion here reached should be annulled and held for naught, and that the judgment appealed from should be in all things affirmed, and it is accordingly so ordered.