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75 Tex. 24

Bohn Bros. & Co. v. Davis

Court of Appeals of Texas

Decided November 5, 1889

Court of Appeals of Texas · decided 1889-11-05

<p>1. Trustee Buying at His Own Sale.—A trustee to whom lands were conveyed in trust to secure his own debt and that of others secured by the conveyance may purchase at his own sale of the land.</p> <p>S. Same—Deed.—A deed from such trustee to himself for land sold as trustee to himself, in absence of fraud, is valid to pass the title.</p> <p>3. Payment.—That the trustee having sold the lands at cash sale executed his promissory notes for the pro rata shares of the other parties interested in the sale, they consenting, is no ground of attack upon the sale by unsecured creditors.</p> <p>4. Grantor to Himself May Prove Deed.—It was not error to allow the maker of the deed as trustee to himself to testify to its execution, there being no witnesses or acknowledgment.</p>

Good law ✅— No negative treatment on recordhow we know

Decided 1889-11-05

How this case has been cited

Cited by 7 later decisions — most recently December 1944

7 state decisions

301889189019001910192019301940decided

Later decisions citing this case, by decade. The current decade is in progress, and our corpus holds fewer opinions from the most recent years, so the latest bars are undercounted — not a real decline.

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HENRY, Associate Justice.

¶1On the 5th day of December, 1884, G. *25W. Davis, being then insolvent, executed a deed whereby he conveyed to L. G. Davis several tracts of land to secure the payment of certain debts specified in said deed (one of them payable to himself), and with authority to the trustee, if the debts secured should not be paid at maturity, at the request of the several creditors, to advertise and sell the encumbered lands .at the court house of the county in which they are situated, at public auction to the highest bidder for cash.

¶2Following the directions of the trust deed the lands were sold by the trustee to himself, and he made a deed conveying them to himself.

¶3He paid part of the proceeds of the sale to the creditors whose claims were secured by the deed of trust, and for the balance he executed to each ■creditor his note for so much of the balance as was due to him.

¶4The creditors accepted without objection the notes in lieu of cash, and do not now complain.

¶5Appellants, who were unsecured creditors of G. W. Davis, recovered judgment against him and purchased the lands sold under the trust deed at the sale made by virtue of an execution issued from said judgment.

¶6This suit is brought by them against G. W. Davis and the purchasers ■of the land through the trustee’s sale, for the recovery of the lands. The petition is in the usual form of an action of trespass to try title, and de-fendants, among other things, pleaded not guilty.

¶7Ho issue of fraud was tendered by the pleadings. Judgment was rendered on the verdict of a jury in favor of defendants.

¶8The deed to L. G. Davis was from himself as trustee to himself as an individual. It was not witnessed, and at the trial he was permitted, over plaintiffs’ objection, to testify to the fact of its execution.

¶9The following are the only errors assigned:

“1. The court erred in permitting L. G. Davis to testify to the execution of the deed.
“2. The court erred in refusing to charge the jury, at plaintiffs’ request, that in order to enable a trustee to convey any title by virtue of a .sale made by him under a deed of trust, the proof should show that all material directions as to the mode and manner of executing the trust were complied with by him.
“ 3. The court erred in failing to charge, as requested by plaintiffs, that a deed made by a trustee to himself individually is null and void/’

¶10We find no error in any of these proceedings. It was held by this court in the case of Howards v. Davis, 6 Texas, 183 (and the doctrine has been approved in subsequent cases), that a mortgagee with power to sell may purchase at his own sale, made at public auction. In that case it was said:

“ A mortgagee is a trustee, but in a qualified sense.- He does not hold ior the benefit of others, but for himself. He is a cestui que trust as well as trustee. He has an interest in the property. It is pledged ex*26pressly to secure his claim, and were he deprived of the power to purchase he might suffer great loss by its sale at a low price. He has an interest that the bid shall amount to his encumbrance, and that the property be not sacrificed, to the injury as well of the mortgagor as the defeat of his own claim, as this may be the only fund for the discharge of his debt. Sales at foreclosures, whether under a power or by decree, are open and public and are made after long notice; and it is to the interest of the mortgagor that the mortgagee should enter into the competition at the sale.”

¶11The only distinction between this case and others on the same subject is, that while in the others only a debt to the mortgagee making the sale was secured, in this other creditors are also secured and interested in the property. We see no substantial reason why the rule should not embrace such cases as this.

¶12If by any means the trust is abused as to the other beneficiaries by the trustee, they have their remedy. In this case they make no complaint. The same may be said about the execution to the other beneficiaries by the trustee and purchaser of his_ notes for their shares of the proceeds of the sale instead of paying them in money. They do not complain, and other creditors can not.

¶13There is no reason why the grantor in a deed may not testify to its execution, in any case, when it is offered in evidence.

¶14The judgment is affirmed.

¶15Affirmed.

¶16Delivered November 5, 1889.

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