Fennimore v. Ingham

HENDRICKS, J. In February, 1912, one Mark Bishop was the owner of 160 acres of land situated in Lipscomb county, Tex., and on that day executed a deed of conveyance for a consideration of $2,000, recited to have been paid, with the name of the grantee left blank in said deed. One Sam Wilson was purchaser of this land, and the agreement between Bishop and Wilson was that the deed executed in blank was for the purpose of permitting Wilson to either insert his own name or the name of the party to whom he might sell the land, as grantee. Bishop was paid in full for said land, and never thereafter asserted any claim upon the same. Wilson thereafter sold said land to one John Coker, delivering the Bishop deed to Coker, with the name of the grantee still remaining blank. Coker traded the land to one G. B. Ingham, in December, 1912, for a consideration of $550, evidenced by a note, on its face a vendor’s lien, due in two years from date, with 8 per cent, interest. The same deed, executed by Bishop, when he sold the land to Wilson, was delivered by Coker to Ingham, and the name of Ingham was inserted as the grantee in said deed. Ingham, for the consideration “of one dollar, and other valuable considerations,” sold and conveyed the same land to one William B. Howe. This deed contained the following recitation: “The above-described land is free, clear and unincumbered, except as herein stated below as follows, to wit: Cue vendor’s lien note for the sum of $550.00, dated Fargo, Oklahoma, December 7, 1912, due in two years from date thereof, bearing interest at the rate of eight per cent, per annum from date, and payable to one John Coker.” Upon the 1st day of October, 1913, Eli C. Gray, purchased the same quarter section of land from Howe, receiving a conveyance of same, for the cash consideration of $100, and at that time the deed from Ingham to Howe was of record in Lipscomb county. Previous to the purchase of the land by Gray from Howe, Coker, the owner of the $550 note, executed by Ingham to him for the land, transferred said note, by blank indorsement, to appellant, N. Fennimore, who brought this suit against Eli G. Gray, for the foreclosure of the vendor’s lien upon said land. The trial court peremptorily instructed the jury to return a [515] verdict in favor of tire defendant Gray, denying plaintiff, Fennimore, a foreclosure of his lien; and this action of the trial court is assigned in this court as error. [1] When Mark Bishop sold the land to Wilson, upon the understanding that the latter could insert the name of the purchaser from him in the deed as his grantee, this was a power coupled with an interest vested by Bishop in Wilson for the benefit of the latter, and is therefore irrevocable (Threadgill v. Butler, 60 Tex. 601); and when Wilson, with this deed, with the name of the grantee left blank, sold the land to Coker, the same power, by implication, was evidently vested, and was intended to vest, in the latter, when the deed was delivered in that condition. When Coker sold his land to Ingham for the sum of ¡¡¡550 evidenced by the execution and delivery of the note mentioned, and the name of Ingham was inserted as the grantee, the whole title to the property passed to him, divesting all equitable interests of the previous vendors of the land on account of their having been paid for said land. Schleicher et al. v. Runge, 37 S. W. 982; Threadgill v. Butler, 60 Tex. 599; Delvin on Deeds, vol. 1 (3d Ed.) § 457, p. 792. This last authority says: “Where the name of the grantee is left blank in a deed, executed and delivered (with parol authority to insert the name of the grantee), it will vest title in any person whose name may afterwards be inserted in the blank by the person who received the deed, or by any subsequent holder of it.” The appellee argues that there is no lien, either implied or expressed: “The most familiar illustration of the equitable lien is the vendor’s lien, which is a lion given to a vendor of real estate, who has executed an absolute deed, without having received the purchase money, and this lien arises even though the recital in the deed acknowledged the receipt of payment, if in fact it was not received. Brandenburg v. Norwood, 66 S. W. 587; Springman v. Hawkins, 52 Tex. Civ. App. 249, 113 S. W. 966; Marshall v. Marshall, 42 S. W. 354; Houston v. Dickson, 66 Tex. 79, 1 S. W. 375; Baker v. Compton, 52 Tex. 252.” Simpkins on Equity, p. 338. [2] We know that this lien has always been favored by the courts of this state, not as a creature of contract, but as incidental to the same, as an equity for the reason that one who purchases another’s land for a deferred consideration should pay for it. Same authority, supra. This record is conclusive that Eli O. Gray, before he purchased the land from Howe, was acquainted with the recitation with reference to the vendor’s lien note contained in the deed from Ingham to Howe. The argument that Coker, who is recited to have been the payee of the note, was not connected with the title to the land of record, has no application to this character of case. The well-known authority of Moran v. Wheeler, 87 Tex. 179, 27 S. W. 54, and like authorities cited in the brief, are not pertinent. [3] The equitable vendor’s lien exists in favor of the assignee of the note and the lien follows the debt. Elmendorf v. Beirne, 4 Tex. Civ. App. 188, 23 S. W. 315; Flanagan v. Cushman, 48 Tex. 244; McCamly v. Waterhouse, 80 Tex. 340, 16 S. W. 19; Hamblen v. Folts, 70 Tex. 132, 7 S. W. 834; Polk v. Kyser, 21 Tex. Civ. App. 676, 53 S. W. 87; Neese v. Riley, 77 Tex. 351, 14 S. W. 65; Russell v. Kirkbride, 62 Tex. 455. [4] This implied equitable vendor’s lien is not waived by the substitution of a third person for the original vendor as payee of the note given for the purchase money. Irvin v. Garner, 50 Tex. 54, and cases cited. [5] One who has notice of the existence of this implied vendor’s lien is not protected as an innocent purchaser. Senter v. Lambeth et al., 59 Tex. 259; McAlpin v. Burnett, 19 Tex. 498. The McAlpin-Burnett Case cited holds that the bona fide holder of the note payable to bearer, and transferred to him by delivery, can enforce the lien, and Justice Boberts also says: “Though. the vendee sell the land to a third person, it is still liable, if his vendee had notice of the lien, either actual or constructive.” Equity does not look to form, but always to the substance of a transaction. It is, of course, true that Mark Bishop was not the beneficiary of the lien — he had been paid in full. However, when Coker, having the irrevocable power coupled with an interest and the equitable right to the land, used the same deed for the purpose of conveying this interest to Ingham and inserted Ingham’s name in the deed, it was just as much a sale and conveyance of the land as though Wilson had previously inserted his name as grantee in said deed, and the latter had then sold the land to Ingham by a separate conveyance for the consideration of the $550 vendor’s lien note. We are not holding that this note represents an express vendor’s lien, though it is recited in its face that one is retained in the deed. We think the note, however, represents an implied vendor’s lien on account of the sale of the land from Coker to Ingham, passing the title and equity, regarding the substance of the transaction and not the form. When Gray was put upon notice that there was a vendor’s lien note outstanding which the land was incumbered with, payable to one John Coker, he had knowledge of a fact which theoretical considerations of our registration statutes could not destroy. It is said that Bishop, in his agreement with Wilson, limited the power of Wilson to the insertion of the name of his purchaser, as grantee, in the blank space, and that the deed could not be used by subsequent purchasers and grantees in passing equitable interests. Properly analyzed, Bishop simply testified that his agreement with Wilson was that the latter could insert the name of his grantee in the deed — nothing was said about any limitation. When Bishop delivered this deed in blank and was paid in full, he was [516] eliminated. Wilson then had the only real interest in the land. When Wilson delivered the same deed in blank and was paid in full, clearly by implication, he intended that Coker could insert the grantee’s name. When Ing-ham bought the land with his name inserted in the deed, he procured the whole title. With Gray purchasing this land upon full notice that an outstanding lien in favor of a man by the name of Coker was existent, Fen-nimore, and not Gray, should have had the peremptory instruction. The cause is reversed and rendered in Fennimore’s favor for the amount of the debt, interest, and attorney’s fees, and the foreclosure of the vendor’s lien. Reversed and rendered. Footnotes [1] (gs^For other oases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes [2] <g£»For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes