Bailey & Pond v. Tindall

Walker, P. J. Com. App.— The facts relied on in the special answer of Bailey & Pond were substantially proved. If Bailey & Pond, being the cestuis que trust in the deed of trust executed to them to secure their indebtedness from Pierce, were innocent purchasers for value, without notice of plaintiffs’ lien, undoubtedly they are entitled to be protected against it. The deed to Pierce from plaintiffs was an absolute conveyance of the land, and acknowledged the payment of the consideration. “ It is well settled that a vendor’s lien cannot be enforced against one holding title under the first vendee by deed, provided the purchase money has been paid before or without notice of the lien.” McAlpine v. Burnett, 23 Tex., 650. It is evident that if Pierce bad conveyed the land, after he obtained the deed, to a purchaser without notice of the existence of a vendor’s lien, for a valuable consideration, which had been paid, such purchaser would take the title exempt from the lien. A mortgage or ‘deed of trust stands upon the same footing as a conveyance by deed. 2 Story’s Eq. Jur. § 1502, note 2. “ The mortgagee,” says Lord Hardwicke, “ is a purchaser fro tanto.” See note 2 above. But Bailey & Pond do not bring themselves within the protection of the principle which has been stated. The debt which their deed of trust was intended to secure was an existing, precedent debt due to Pierce when the deed of trust was executed; they gave no additional consideration to procure it. [542] ■ Justice Moore, in Ayres v. Duprey, 27 Tex., 606, said: “To constitute a person a Iona fide purchaser, he must have advanced the consideration for the purchase. It will not constitute a bona fide purchaser, that the creditor bids off the premises, and applies the bid on his judgment. That is a precedent debt, and the consideration is not advanced upon the faith of the purchase.” In Wallace v. Campbell, 54 Tex., 91, it was held, it is true, that a judgment creditor who purchases at execution sale, and has the amount of his bid" credited on the execution, may be considered a bona fide purchaser; but that decision does not extend the principle under consideration beyond the point decided, and the rule applicable to a judgment creditor rests upon its own reasons of policy and expediency, and the decision leaves the principle to be applied to other cases as before. See, also, remarks of Chief Justice Roberts in Ellis v. Singletary, 45 Tex., 40, on the point above referred to in Wallace v. Campbell, indicating the inclination of th,e courts, for the sake of expediency, to combat the unqualified application of the general rule, to the extent of excepting judgment creditors from its operation where they purchase under their own judgments, and apply their bids to their satisfaction. The evidence fails to show that Bailey & Pond were purchasers for a price paid, or a valuable consideration; but to the contrary, that they acquired the deed of trust to secure an antecedent indebtedness. Their equity, therefore, is subordinated to that of the plaintiffs, and they, as purchasers with notice given to them at the trustee’s sale of the property, acquired a title to it which was subject to the plaintiffs’ lien as vendors. Between equities, the established rule is that he who has the prior equity in point of time is entitled to the like priority in right. We conclude that the judgment ought to be affirmed. Affirmed. [Opinion approved June 5, 1883.]