Cassaday v. Franklard

Quinan, J. Com. App. The question to be determined in this case is, whether the plaintiff Frankland, upon the state of facts, established his right to recover the land. He claims that, as it is not shown that the purchase money has been paid, the superior title to the land is in him as surviving assignee. It is certainly well settled in numerous decisions in this state, that in sales of land the superior title remains in the vendor until the purchase money be paid, when the conveyance is executory, or when a mortgage for unpaid purchase money is given simultaneously with the deed, or when an express lien is retained in the deed. Webster v. Mann, 52 Tex., 425. But it is also well settled that this superior title does not remain in the vendor where no express lien has been reserved, nor where a mortgage is taken subsequently to the execution of the déed to secure the payment of the purchase money; nor does it attach to the notes given for it. The holder of the notes is not in any case the holder [458] of the legal title to the land, unless he is the original vendor or his heir or representative; nor will this superior title follow (Baker v. Compton, 52 Tex., 252) the assignment of the mortgage and vest in the assignee. In Wright v. Wooters, 46 Tex., 383, it is said by the present chief justice, “that whilst the doctrine that a mortgage to secure the purchase money, executed by the vendee at the time he receives his conveyance, has the effect to make the contract executory, is well settled by numerous decisions of this court, it is believed that its extension, so as to give like rights to others than the vendor, may lead to confusion, and that such applications of the principle should be made only in cases where the right is clear.” In order that this superior title may remain in the vendor, it would seem essential that the ownership of the purchase money notes should remain with him also. Certainly, if he has parted with the notes and mortgage executed to him for payment of the purchase money, he cannot be said to retain any longer any title to the land. Catlin v. Bennett, 47 Tex., 172. We have found no case in which it has been held that where the purchase money notes are made payable to a third person, and the mortgage to secure them executed to a third person, that the legal title then remains in the vendor. The vendor reserving a mortgage has the right, upon default of payment, to enter upon the land, if he can do so peaceably, or to sell it, or to sue for it and recover it. Manifestly he can exercise none of these rights where the debt and the mortgage belong to another. And if he cannot exercise them in such case, it is because he does not possess them. He has parted with the land and with the consideration for it, and the title to it. And it would not be reinvested in him by a reassignment to him of the mortgage, or a retransfer to him of the notes.- [459] But in the case before us, there would seem to be no difficulty in coming to the conclusion, under the peculiar circumstances of it, that the plaintiff has not the superior title to the land sued for. We think it evident from the proofs that it was not the intention of the parties that the assignees should retain the legal title until payment of the money. The object of the transaction between Barnes and Jones and his representatives was to provide security for the payment of Barnes’ debt,— to put the securities in such a shape that neither Jones or the assignees could divert them to any other use than the. payment of the debt, and that the property subjected to it, and all rights of Jones in it, should be closed out once for all by the sale of it. That it should be turned into notes with good personal security and mortgage, not to Jones or his assignees, but to Lanfear. (This was the security bargained for.) The decree limiting the powers of the assignees says “that the assignees shall execute deeds to the purchasers, which deeds shall be valid in law to convey to said purchasers all the right, title, interest and claim of the said estate of the said B. P. Jones and of the defendants,” and that these deeds shall be without warranty. The notes and mortgages were payable to Lanfear; the assignees were authorized indeed to collect them, but they were to pay the proceeds to Lanfear. And at any time Barnes or his attorney had the right to take any of the notes and credit the amount upon his debt. Now the reservation of the legal title in these assignees is inconsistent with the carrying out of these stipulations. If the legal title remained in them, upon default in payment of the notes they could sell the land to another, or take possession of it; but this very clearly they could not do here. The vendor who retains the notes and express lien can sell the land, on default, but by that act he discharges the debt. In this case the mortgage to Lanfear would be unaffected by the act of the assignees; he only could [460] release it. So, recognizing the legal title in these assignees, and their right to retake the land or sell it, would be to deprive Barnes of the right he contracted for to take upon his debt such notes and mortgages as he might select. But there is another fact in this connection entitled to consideration in the determination of the controversy. It is seen from the assignment and the decree, that Barnes had no right to the possession of these notes and mortgages unless taking them as a credit upon his debt. The assignees were to retain control over them for collection. But Frankland says he turned them all over to Barnes’ attorney for collection. Could Frankland then sell the land? And when the notes passed into Barnes’ hands, whether for collection or upon his election to take them as a credit upon his debt, certain it is, that having retained them until they were barred by limitation, and no recovery could be had upon the mortgage or against the securities, Barnes was responsible for the amount, and could be compelled to credit it upon his debt, whether he had elected to take the notes and mortgages or not. So that neither the assignees nor the trust estate has suffered loss. And if Lanfear or Barnes have, it is attributable to their own laches. These views lead us to the conclusion that the legal title to the land is not in Frankland, and that he cannot recover. We add, that whilst there is undoubtedly an equity that a vendor selling his land shall not lose it unless it is paid for, that this doctrine of the superior title remaining in him, is one, as said by Judge Gould, not to be extended or enlarged. It should be recognized and enforced as a remedy only in the clearest case, and as a right not assignable. Used as a means for the collection of debt after the lapse of years, on pain of forfeiture perhaps of greater part of the purchase money of the land paid, it may become an engine of intolerable oppression. [461] There have been two trials, and this is the second appeal in this case. We are of opinion the judgment should be reversed and the cause remanded. Reversed and remanded. [Opinion delivered December 10, 1881.]