Green v. Eddins

As a right to the land or an interest in it could not be predicated on the forged deeds from Eddins to Cummins and Cummins to Hutcherson (Abee v. Bargas, 65 S.W. 489; Blair v. Hennessy, 138 S.W. 1078; Loring v. Jackson, 43 Tex. Civ. App. 306, 95 S.W. 21), it is plain that Green was entitled to relief he sought, unless some of the parties claiming adversely to him had acquired rights superior to his by force of the instrument from Brummett to Arnold, dated January 25, 1912. That instrument purported to convey to Arnold an interest owned by Brummett in the land and in the Eddins notes. As Brummett had previously assigned those notes to Hyde and, by the instrument dated August 19, 1910, had conveyed to him "the contract lien, vendor's lien, rights, equities, and interest" which he as the vendor thereof had in the land, it is clear that the only right he had with reference to either the notes or the land was the right to demand and receive any balance remaining of the proceeds of a sale thereof made to satisfy his note for $4,500 to Hyde, then held by Green. The right to this balance was all that he did or could pass by his assignment to Arnold, and all that Arnold did or could pass to Hutcherson and those who claimed under him. Neither Hutcherson, Roark, Owens, Green, Mrs. Moore nor the Bonner Loan Investment Company should be heard to assert any other and greater right, unless they were, as to Green, in the attitude of innocent purchasers for value. It is obvious that none of the parties named were in that attitude as to the land, for Brummett's deed to Eddins was of record at the time of the transactions they relied on, and therefore they could not claim to be without notice of the fact that Eddins owned the land, and that Brummett at the most had conveyed, and could convey, to Arnold, under whom they claimed, only such right as he, as the vendor thereof with part of the purchase price unpaid, possessed. That right, on the facts here, was to enforce, as against Eddins and the land, the payment of the remainder of the purchase price represented by the Eddins notes. That right in Brummett passed to Arnold. The parties claiming under the latter doubtless would have had equities superior to the right in Green if the assignment of the notes by Brummett to Arnold had been accompanied by a delivery to him of the possession thereof. In that event, it might be said that Arnold and the parties who had acquired his rights were in the attitude of innocent purchasers of the notes, and entitled to priority as against Green, because of his failure to have the assignment from Brummett to Hyde placed of record. As, however, the notes were never in Arnold's hands, nor in the hands of any of the parties claiming under him, but all the time were in Green's possession, neither Arnold nor those who had acquired his rights could claim to be innocent purchasers thereof. "The possession of commercial paper," said the author of the article on "Bills and Notes" in the American and English Encyclopedia of Law, "is not only the legal evidence of ownership, but it is that evidence required in dealing with it in the ordinary course of business; consequently, where the transferee takes merely an equitable assignment of paper not at the time in the possession of his transferror, he is not entitled to protection as a holder in due course of trade." The conclusion we have *Page 199 reached is that Green was entitled, as against all the parties who claimed rights adverse to him, to relief he sought, and that the court below erred in refusing him relief. The conclusion to the contrary reached by that court was not, we think, authorized by the rulings made in Drumm Commission Co. v. Core, 47 Tex. Civ. App. 216, 105 S.W. 843; King v. Quincy National Bank, 30 Tex. Civ. App. 92, 69 S.W. 978; Moran v. Wheeler, 87 Tex. 181, 27 S.W. 54; and Loan Association v. Brackett,91 Tex. 44, 40 S.W. 719, cited in the brief of Newbury, Mrs. Moore, and the Bonner Loan Investment Company. Each of those cases on its facts is believed to be clearly distinguishable from this one.

The judgment will be reversed and the cause remanded, with instructions to the court below to render judgment in favor of Green against Eddins for the amount unpaid of the four notes made by Eddins to Brummett, foreclosing, as against all the other parties, the vendor's lien reserved in said notes and in the deed from Brummett to Eddins on the land described in Green's petition, but subject to the lien, if asserted, in favor of Newbury for the $647.16, and interest thereon paid by him to the state as the balance of the purchase money due to it on the land, and directing the sale of the land as under execution, and the application of the proceeds to the payment in full of the amount due on the note for $4,500 made by Brummett to Hyde. On the pleadings in the record we are unable to determine how the balance remaining, if any, of such proceeds should be disposed of.

On Motion for Rehearing. If it should be conceded that Newbury and those claiming under him had a right to deal with the land, on the theory that the Eddins notes, while owned by Arnold, had been paid in full, as recited in the release to Hutcherson, it would still appear that appellees were not in a position to object to the granting to appellant of the relief he sought; for it appeared that Newbury did not acquire an interest in the land by his purchase from Hutcherson and Roark, because neither of those parties, in fact, owned, nor appeared on the face of the record to own, an interest in same at the time they conveyed it to him. Before Newbury could claim to be in the attitude of an innocent purchaser of the land, it must have appeared that he purchased it from some one he had a right to believe did own it. He not only did not have a right to believe Hutcherson and Roark owned it, but he knew from the face of the record that Eddins owned it. Never having acquired an interest in the land, it was no concern of his that appellant sought to foreclose a lien against it. In the view appellees take of the case, we think they lose sight of the fact that Newbury never acquired, nor in any way connected himself with, the title in Eddins. The case would be different if it appeared that Newbury, relying, and having a right to rely, on the release by Arnold of the vendor's lien, had acquired the Eddins title. He might then be in a position to defeat a foreclosure of the vendor's lien asserted by appellant as the true owner of the Eddins notes.

The motion is overruled.