Senter & Co. v. Lambeth

Opinion by West, J. The fourth finding of the court is that the appellants had no notice of the vendors’ lien of appellees until the day of sale, at which tune and immediate]}' before the sale appellees gave public notice through their attorneys of their lien on the land about to be sold. The sole question in the case is, whether, under the admitted facts, the lien and rights acquired by virtue of the writ of attachment, judgment and sheriff’s sale are superior to those of the appellees, who hold the unrecorded vendor’s lien of which appellants had notice at or before the sale, but of which no notice was had when the writ of attachment was levied, or when the judgment was obtained. The evidence of the vendors’ lien in this case was not recorded, nor was it in the form in which it existed (being the lien, springing by operation of law, out of the transaction between the parties) susceptible of registration. Let us examine in this connection some of the adjudged cases in which the effect of this want of registration has been considered. In Grace v. Wade, 45 Tex., 528; Borden v. McRae, 46 Tex., 396; Ayres v Duprey, 27 Tex., 593; Wallace v. Campbell, 54 Tex., 90, and perhaps in some other cases that have escaped our observation, it has been held, that by force of our registration laws alien acquired by a judgment or the levy of an execution, on the real estate of the debtor, [939] is superior to the legal title, which had been previous to the date of the lien conveyed by him by deed to a third party, hut which deed had not been recorded, and of which the the creditor at the date his lien was fixed, did not have actual notice, and further that this superiority was not affected by the fact that actual notice of the unrecorded deed may have been given at or before the day of sale. In the case of Grimes v. Hobson, 46 Tex., 418, the rule is laid down by Mr. Justice Moore, in substance as follows : That an unrecorded deed conveying the legal title is void by reason of our registration act, against a creditor who had acquired in accordance with law, a specific lien or interest in the land in suit by the levy of an execution, and that the creditor or any one else, who might purchase the land at the sheriff’s sale, would get a good title as against the unrecorded deed, notwithstanding the purchaser might have had full notice of his legal title when he purchased, provided the creditor had no notice prior to the fixing of his lien on the record. In Wallace v. Campbell, 54 Tex., 90, it is intimated that the rules above laid down as to a parchase by creditors are supported by sound reason, and if they were not enforced, might often end in the sacrifice of the property and loss of the debt to the detriment of both creditor and debtor. The lien, however, it must always he borne in mind, in considering, these cases, and all cases of a like character, prevails over the unrecorded deed, alone by force of and by virtue of the registration laws. These decisions only apply to cases where the third party to be affected by the unrecorded conveyance acquired thereby the legal title; or when his right or interest is represented by some written instrument, that is required or permitted by law to bo recorded, and which he has neglected to record, and of which the judgment creditor had no actual notice at the date of the acquisition of his lien. This court has never held that fhe doctrines above announced applied to cases where the rights of a third party, as in this case for example, claiming through or under the judgment debtor, were purely equitable in their character, and which were not in their nature susceptible of registration, when actual notice of such equitable title was brought home to the purchaser, before the sale and purchase. In Blankenship v. Douglas, 26 Tex., 229, it was stated [940] that a purchaser from J. J. Blankenship, who held the land in question in that case in trust for David Blankenship without any notice and for value, would take the estate, discharged of the equity of David Blankenship. Iu the same case, in remarking on the fact that though David Blankenship’s equity was unknown when the judgment lien of the creditor, Mullens, was acquired (as in the case at bar), yet that it was made known to the purchaser before the sale, it was observed that if the sheriffs sale had been consumated without any such notice to Mullens, or the purchaser, of the equity of David Blankenship, he then would have (perhaps) occupied the position of an ordinary purchaser, and might have taken the land discharged of every claim whatsoever, whether arising under an unrecorded deed, or growing out of som.e equity that might exist in favor of a third party. In Grace v. Wade, supra, this court most cordially approves of the views of the court, as expressed in the case of Blankenship v. Douglas in relation to the protection of equities that by their very nature and character could not he the subject of registration. The court in this' connection uses the following strong language : “We also cordially approve and reaffirm the decision in Blankenship v Douglas, to the effect that a judgment lien on land extends to and binds only such estate as the debtor has when the lieu attaches, except as this doctrine (which is admitted to he the general and correct rule) is qualified by the operation of our registration laws prescribing the effect of unrecorded conveyances and mortgages upon the right of creditors and purchasers.” Wo arc of opinion, iu accordance with these views, that the vendor’s lein, which, as we have said, springs out of the nature and character of the transaction between the parties, and originating and existing wholly independent of any contract of any kind whatever, verbal or written, between the parties, is that character of equitable claim which is beyond the contemplation of our statutes of registration. As a consequence patting then in this case the effect and operation of the registration law on unrecorded conveyances out of the question, as in no way controlling the subject matter now in hand, wc find that the lien asserted in this case on the land of the debtor, Lambeth, by the at [941] tachingand judgment creditor, is subordinate to every equity of this"particular character, which existed against the land in the hands of the judgment debtor, at the time of the rendition of the judgment or the levy of the attachment. In such a case, where there is actual notice given at the sale, it is said in Blankenship v Douglas, that a court of chancery will protect the equitable rights of third persons against the legal lien, and will limit and confine the operation of the lien of the judgment creditor, to the actual interest which the judgment debtor has in the estate at the time the lien is fixed. In the leading case of Briscoe v. Bronaugh, 1 Tex., 333, Judge Wheeler, speaking of the implied lien that always in such cases exists in favor of the vendor, says: “There is a natural equity that the land should stand charged with so much of the purchase money, as is not paid, and that, too, without any agreement to that effect. It is founded on an implied trust between the vendor and vendee.” The purchaser is regarded by a court of equity, as trustee of his vendor, holding for his use until the purchase money is paid. (Flanagan v. Cushman, 48 Tex., 244.) In the very well condensed case of Grace v. Wade, above cited, and in which all the previous decisions of the court on this subject are re-examined and reviewed with great care, and in which the case of Price v. Cole, 35 Tex, 461. is expressly overruled, the case of Orme v. Roberts, 33 Tex., 768, is adverted (o and examined closely by the court, and its doctrine seemingly affirmed, or at least not in any manner doubted or questioned. In that case (Orme v. Roberts) it was held that the right set up, by virtue of the vendor’s lien, was superior to that claimed by virtue of the judgment lien. The facts show that the purchaser in that ease, though without notice, when the judgment lien attached, had actual notice of its existence at the time of purchase. In commenting on this case, in Grace v. Wade, this court says, in substance, speaking in reference to the facts in the case of Orme v. Roberts : “The court in its opinion says that the vendor’s lien was not within the registration acts, and hence the other party could not claim under them (the registration laws), andas he purchased Us pendens he could not be protected as a purchaser wiihout notice.” [942] Under the previous decisions of this court we are therefore of the opinion that the purchaser in this case haviug notice at the time of the sale, of the appellees’ rights, cannot be held to be a purchaser without notice, although he in fact had no actual notice when the lien first attached. Art. 2318 of the Revised Statutes is referred to, and seems to be relied on. That article is as foliows : “A purchaser, at sale under execution, shall be deemed to be an innocent purchaser, without notice in all cases when he would be deemed to be sucb, had the sale been made voluntarily by the defendant in person.” If the appellants had purchased directly from the judgment debtor, with the same notice of the existence of the vendors’ lien that they had when they obtained his title at the sheriff’s sale, the result of the case under that statute would have been the same. They are not under the previous decisions of this court entitled to protection, as innocent purchasers, under our registration laws, because these laws do not apply, as we have seen, to the present casé, and hence in the absence of such application they hold the property in question subject to the superior equitable lien and demand of appellees. The judgment is affirmed.