McLeary v. Dawson , 87 Tex. 524 ( 1895 )

This suit was instituted by the plaintiffs in error against the defendants in error to recover the land described in the petition.

Plaintiffs' petition was in the form of trespass to try title. The defendants pleaded not guilty, and defendant Skinner pleaded possession in good faith and valuable improvements.

The court instructed the jury to find for plaintiff for the land, and submitted to them the question of improvements in good faith as claimed by defendant Skinner. A verdict was rendered for plaintiffs for the land, and for Skinner for improvements. The defendants appealed to the Court of Civil Appeals, which reversed the judgment and remanded the case as to Skinner, and affirmed the judgment of the District Court as to Dawson.

Plaintiffs claim title to the land under patents issued to Acker Toland in 1890, which embraced the lands claimed by defendants. It was agreed that plaintiffs have the title of Acker Toland.

The patents were issued by virtue of certificates granted under an Act of the Legislature of Texas, entitled, "An act granting to persons who have been permanently disabled by reason of wounds received while in the service of this State, or of the Confederate States, a land certificate for 1280 acres of land," approved April 9, 1881. The certificates were transferred to the patentees in 1882. The record does not show when the original surveys or the locations were made, but corrected field notes were returned to the General Land Office in 1890. The act under which the certificates were granted was repealed February 2, 1883.

Defendants claim the land under surveys made for the Bastrop Manufacturing Company, and field notes returned to the Land Office in 1874. The claim of defendants is based upon the following facts: The Legislature of Texas passed an act entitled, "An act to encourage the erection of certain machinery by donations of land and otherwise," approved December 15, 1863, which granted lands to persons or corporations erecting and putting into operation specified kinds of machinery, prior to March 1, 1865. S.S. Munger and others, under the name of Ward, Munger Co., purchased and began the erection (if they did not complete it) of machinery of the kind specified in the act, and afterwards procured a charter, by special act of the Legislature, entitled, "An act to incorporate the Bastrop Cotton and Wool Manufacturing Company," approved November 7, 1864. In 1868 the Bastrop Manufacturing Company, being indebted, gave a deed of trust to Jones Sayers, as trustees, upon certain property described in the deed, with power to sell it and to pay the debts named. The debts not being paid, the trustees sold the property, and John Fawcett purchased it for himself, G.W. Jones, and others, who afterwards formed a partnership, under the firm name of John Fawcett Co.

At some subsequent date, the purchasers of the property and others to whom they had sold interests assumed to own the stock of the Bastrop Manufacturing Company, though there never was any transfer of the stock to either of said parties, and under that assumption of ownership of stock, reorganized the said corporation, electing G.W. Jones president. Fawcett, who seems to have been president of the company before the sale, and presumably a stockholder, delivered the seal of the company to Jones. Fawcett Co. paid the debts of the corporation. The Governor of Texas, E.J. Davis, wrote to one Campbell, appointing him agent of the State to inventory the property "said to have been erected and put in operation" by the company, and gave directions as to what he should do, which letter will be referred to more particularly if found necessary in the disposition of the case.

G.W. Jones, acting as president of the Bastrop Manufacturing Company, appointed A.A. Erhard as commissioner to represent the company; Erhard and Campbell appointed J.L. Delaney, and the three proceeded under the law to inventory and appraise the property, and returned the appraisement and affidavits to the Commissioner of the General Land Office. The Commissioner of the Land Office refused to issue any certificate thereon, but Jones took a certified copy of the report of the commissioners and placed it in the hands of certain land agents and surveyors, and had the land surveyed and the field notes returned to the General Land Office, the surveys being platted on the map of the county in the Land Office. Jones afterwards bought the interest of his associates in the property purchased at the sale of the property of the manufacturing company, and claimed to be owner of all the stock of the corporation, and assumed to act as president of that corporation. As such sole stockholder and president, as well as in his own right, Jones for a valuable consideration deeded the lands to the defendant Skinner.

The defendants claim that the patents under which the plaintiffs assert title are void, for the following reasons:

1. That the act under which they were issued is in violation of section 4 of the Fourteenth Amendment to the Constitution of the United States, because said donations were in discharge of a debt or obligation incurred in aid of the rebellion.

2. That the act under which the certificates were issued was repealed before they were located, and no saving made of the rights of holders of unlocated certificates.

3. Because the lands were not located in alternate sections for the locator and the school fund as required by law.

If the patents are void, then plaintiffs can not recover, though defendants may have no title; and it becomes necessary, as plaintiffs are asking a reversal of the judgment of the Court of Civil Appeals, to determine as to the validity of these patents before proceeding to examine into defendants' title.

The patents under which plaintiffs claim passed the legal title to the patentees, and are not subject to attack by any one except the State, or some person having a prior legal or equitable right to the land.

The Act of 1881, under which the certificates were issued to "persons permanently disabled while in the service of the State or the Confederate States, under violative of the fourth section of the Fourteenth Amendment to the Constitution of the United States. The Legislature in enacting this law did not pay or discharge any debt or obligation to those persons, except a moral obligation to aid persons who were unable to support themselves by reason of disability, and it did not matter whether that condition was produced by wounds received in the service of the State or Confederate States during the war between the States, or by other causes. The State had the right to bestow its bounty upon such of its citizens as it might think proper subjects of it.

The repeal of the Act of 1881 did not affect the rights of the holders of certificates transferred to them before the repeal took effect. They had a vested right of property in them that the Legislature could not destroy if it had been so intended; but we do not think the law subject to that construction. We do not intend to intimate that it would have a different effect as to the original grantees.

Although it has been held that the location of the certificates as alleged to have been in this instance was contrary to law, and that such locations and surveys were void as such, yet when the land was patented upon these surveys the legal title passed to the patentees, and no one but the State or some one having a prior legal or equitable claim could set up the illegality in making the surveys. Todd v. Fisher,26 Tex. 239; Bryan v. Shirley, 53 Tex. 459 [53 Tex. 459]; Wood v. Durrett, 28 Tex. 438. In the case of Wood v. Durrett, the location and survey were void when made, and would not support an action; but after the patent issued the court held, that it could not avail one who had no prior equity. The court said in that case: "Although the survey upon which plaintiff counted in his original petition was void, his patent (which had been issued subsequently to the filing of the suit) is evidence of title (under the amended petition), and the judgment of the court below in his favor can not be questioned, unless the defendant has shown an older and superior right."

The plaintiffs were entitled to recover, and the district judge rightly instructed the jury, unless there was evidence tending to establish all the facts necessary to show that the surveys made for the Bastrop Manufacturing Company were made according to law.

Plaintiffs contend that the defendants never had any valid claim to the lands, because:

1. The Act of December 15, 1863, under which they claim was in aid of the "rebellion," and void.

2. Because said act was annulled by the Constitution of 1869.

3. That the Bastrop Manufacturing Company never had any right to acquire the land.

4. If that corporation had such right it never passed to Jones and his associates; that said company never took any steps to acquire the land, and the proceedings by which the land was surveyed were void.

5. That the Governor of Texas never appointed a commissioner under the statute.

6. That the Commissioner of the General Land Office never issued any certificate as required by law, and no such certificate was presented to the surveyor.

It devolved upon the defendants to prove the facts essential to show that the right of the Bastrop Manufacturing Company to acquire the land under the act in question existed, and that this right had been exercised in the manner required by law; also that the right acquired by the surveys was vested in them, the defendants. Maxwell v. B. M. Co., 77 Tex. 233.

Plaintiffs in error contend that the Act of December 15, 1863 entitled, "An act to encourage the erection of certain machinery by donation of land and otherwise," was enacted in aid of the "rebellion," and therefore void. This question was properly disposed of by the Court of Civil Appeals, and does not require further notice. It is likewise claimed, that the act was annulled and all rights under it destroyed by Section 34, article 12, of the Constitution of 1869. This was not a debt within the meaning of the Constitution, and therefore is not affected by it. If, however, the parties had performed all the acts required by the law of 1863 so as to entitle them to acquire the land, it became a vested right that the convention which framed the Constitution could not have destroyed, if the language justified the conclusion that it was so intended.

The findings of fact by the Court of Civil Appeals are not sufficiently full upon some points for a perfect understanding of the questions presented, and we resort to the undisputed evidence upon these questions in aid of the findings of fact.

It appears from the evidence, that in 1863 S.S. Munger, P.R. Smith, and A.J. Ward entered into a partnership, under the firm name of Ward, Munger Co., for the purpose of erecting and operating machinery at Bastrop, Texas, for the manufacture of wool and cotton into thread and cloth, and did erect the machinery and perhaps operated it. They with others then secured a charter from the Legislature, under the name of the Bastrop Manufacturing Company, by special act, entitled, "An act to incorporate the Bastrop Cotton and Wool Manufacturing Company," approved November 7, 1864. The third section of this charter is as follows: "That the buildings, lots, engines, spinning, and all the factory machinery of Ward, Munger Co. in the town of Bastrop, now being put in operation by them, is hereby declared to be the property of the said Bastrop Manufacturing Company, upon the said Ward, Munger Co. executing to the said manufacturing company proper releases," etc. This section of the charter, under which plaintiffs claim, declares in effect, that the building, lots, engines, spinning, and all factory machinery, etc., was then the property of Ward, Munger Co.; and it also discloses the purpose on the part of the incorporators, that this property should by proper conveyance pass to the corporation. It follows, that if Ward, Munger Co. had then acquired the right to land, it did not pass to the corporation by this act of incorporation. Carothers Searight v. Alexander, 74 Tex. 327. There is no evidence that the firm or the members of the firm of Ward, Munger Co. ever transferred this right to the manufacturing company. We think, that if the machinery was not at the time put intosuccessful operation as required by law, but was afterwards so put into operation by the corporation, the right to the land would be complete in the persons who had erected and were putting into operation, and not in the corporation, which certainly had not erected it according to its charter. The relations between the members of the firm and the corporation which they procured to be formed, and of which they were stockholders, were such, that the corporation might under the law have taken the right to acquire the land by transfer, although not authorized by law to purchase and hold real estate except such as might be necessary to carry out the purposes of its creation. If it be admitted that the right to the land vested in the manufacturing company by virtue of the charter, it is certain that this right did not pass to the purchasers, Fawcett, Jones, and others, under the trust deed. Maxwell v. B. M. Co., 77 Tex. 233.

The second section of the Act of 1863, under which the right to the land is claimed, provides, that upon being "notified of the erection and completion of any machinery of the kind specified in the foregoing section, and upon being satisfied that said machinery was erected and put into operation within the time prescribed in the first section of this act, it shall be the duty of the Governor and owner or owners of said machinery to appoint each one disinterested person to act as commissioner, who shall appoint a third commissioner to act with them, in the valuation of said machinery." The section prescribes the oath to be taken by the commissioners. The third section prescribes the manner of making and returning the appraisement to the General Land Office. The fourth section grants to each person or corporation complying with the law, 320 acres of land for each $1000 of value of the property as appraised. The fifth section directs, that the person or corporation having complied with the law shall receive from the Commissioner of the General Land Office a certificate to the effect that the law has been complied with by filing the appraisement and affidavits required, and shall present it, with an application describing the land to be surveyed, to the surveyor of the district, whereupon the land shall be surveyed, and be thereafter exempted from preemption or location.

Looking to the protest filed by Governor Davis in the General Land Office, and the letter written by him to Campbell, we conclude that he intended to appoint Campbell commissioner under the statute. It is not necessary for us to decide whether or not it is in such legal form as to be valid, for the law required also that the proper parties, those entitled to the land, should select one commissioner, who, with the commissioner appointed by the governor, should appoint a third, who should appraise the property, machinery, etc. Jones had no right in the matter by reason of his purchase of the machinery, as we have seen, to act in the matter. He, however, assumed to act as president of the Bastrop Manufacturing Company, and in its name appointed a commissioner. He owned no stock in that corporation, neither did those who elected him. It was said that Jones was de facto president. In order to be a de facto corporation there must be a right under the law to incorporate, and an attempt to comply with the law, but a failure to comply with some requirements thereof. In this case, Jones and those who acted with him had no rights under the charter; and he could not be de facto president of a de jure corporation by usurping powers to which he had no color of legal right, based upon the action of a self-constituted body which was not even a de facto corporation. Allen v. Long, 80 Tex. 266.

We conclude that the appointment of Erhard by Jones was without any authority of law and void, and therefore that the appraisement was void and gave no right to any one.

The law required that the Commissioner of the General Land Office issue his certificate, showing compliance with the law, as a prerequisite to the making of the surveys; and this not having been done, no legal survey could be made. Jones testified, that the Commissioner of the General Land Office refused to issue "land certificates to the company," and that he (Jones) took a certified copy of the appraisement and affidavits, and had the land surveyed upon them. This the law did not authorize. These papers were filed in the Land Office as evidence upon which the Commissioner was directed to act, and, finding them to be correct, was required to issue the certificate stating that fact, upon which certificate the land could be surveyed.

Therefore, if we admit as true all that the evidence tends to prove, that is, that the Bastrop Manufacturing Company was entitled to acquire the land, the defendants have failed to show any right in this land; because, in the first place, that company did not appoint the commissioner to appraise the property, and Jones had no power to do so; and secondly, if the corporation had performed all these acts, the surveys made without the certificate being issued by the Commissioner of the General Land Office were without authority and void. The defendants had no right, legal or equitable, in the land.

It is suggested by the Court of Civil Appeals that this land, being "equitably owned" by defendant Skinner, was not subject to location under section 2, article 14, of the Constitution of 1876. The claim here presented does not come within the provisions of the Constitution. Adams v. Railway, 70 Tex. 269 [70 Tex. 269]. In the case last cited, the court say: "It must not only be claimed under such color of title, but the facts which give color of title must also give equitable ownership, or the provision of the Constitution does not give protection." This was an attempt to appropriate land without any lawful authority, and could not constitute color of title; the land was subject to location by plaintiffs.

The Court of Civil Appeals found, that the defendant Skinner was not entitled to recover a part of the sum awarded to him by the jury for improvements, and as we believe that he is entitled to a trial before a jury upon this issue, the cause having been tried by jury, we will not undertake to adjust the rights of the plaintiffs and defendant Skinner to improvements and rents. It is therefore ordered, that the judgments of the District Court and the Court of Civil Appeals be reversed, and the cause be remanded to the District Court, with instructions to try the issue between the plaintiffs and defendant Skinner as to rents and improvements in good faith, and thereupon to enter judgment for the plaintiffs against Dawson and Skinner for the land. It is ordered, that plaintiffs in error recover of defendants in error all costs of the Court of Civil Appeals and of this court.

Reversed and remanded.

Delivered February 18, 1895.