The appeal is from a judgment in favor of appellee against appellant for the title and possession of personal property, consisting of well-drilling machinery and tools. The nature of the present suit can probably be best understood by a recital of the facts of a former suit, pleaded herein by appellant as res adjudicata of the issues involved. On the 17th day of June, 1927, Allen Buell, Jr., executed to appellant a chattel mortgage upon the property in controversy. This mortgage was signed, "Grider Buell, by Allen Buell, Jr." Thereafter appellant instituted a suit against A. D. Grider and Allen Buell, Jr., on a note for which the mortgage was executed as security, and for a foreclosure of the mortgage lien.
Grider answered in that suit, admitting in part the indebtedness to appellant, but defending against a foreclosure of the mortgage on the ground that the property covered thereby was not the property of Grider Buell, but was the individual personal property of Grider alone, in which Buell had no interest.
Issues were joined in that suit as to the authority of Buell to execute the mortgage, and resulted in a judgment in favor of appellant herein, foreclosing the mortgage as to all of the property. No appeal was prosecuted from that judgment.
The record discloses that appellee, Putnam Supply Company, filed a petition in intervention in that cause, declaring upon a mortgage executed to it by Grider. The judgment recites, "and the Putnam Supply Company, intervenor in said cause, having been permitted to withdraw its application to intervene." At the foreclosure sale under the original
judgment appellant became the purchaser. Prior to the date of the foreclosure sale appellee had caused the property to be sold under a power contained in a mortgage executed to it by Grider, and became the purchaser at the sale. Appellee's mortgage was dated subsequent to appellant's mortgage, but prior to the judgment foreclosing appellant's mortgage and prior to the institution of the suit for that purpose. The instant suit was filed by appellee to establish its title to the property as against the title of appellant obtained under his foreclosure suit.
Only two issues were answered by the Jury upon the trial of the instant case, and upon these answers judgment was rendered for appellee. These issues and the answers thereto were as follows:
"1st. On the 17th day of June, 1927, the date of the defendant Livezey's mortgage, were Arch D. Grider and Allen Buell, Jr., partners, as that term has been defined herein for you? Answer `No.'
"2d. On the 17th day of June, 1927, the date of the defendant Livezey's mortgage, was all or any part of the property in question the property of Arch D. Grider? Answer `Arch D. Grider owned all.'"
Eleven propositions for reversal, based upon thirteen assignments of error, are presented in appellant's brief. We shall not discuss each of these propositions separately, but shall discuss the controlling questions of law presented.
A special exception was sustained to paragraphs 3 to 10, inclusive, of appellant's first amended original answer, and this ruling of the trial court is assigned as error. This answer, among other things, pleaded the mortgage executed by Allen Buell, Jr., to appellant; alleged that Grider Buell were partners, and, as partners, were indebted to appellant in the sum of $2,206, and to evidence such indebtedness the partnership of Grider Buell, acting through Buell, executed to appellant a promissory note and the chattel mortgage first above described in this opinion. The court erred in sustaining a demurrer to this pleading. Appellant's claim of title came through this mortgage. A fact issue involved in this suit was whether Buell had the authority to execute this mortgage. That fact issue could be determined only from the evidence. Clearly, to our minds, appellant's pleading declaring upon this mortgage was not demurrable. So to hold would have the effect of denying appellant the right to plead his title. The facts alleged, if true, established a better title in appellant than that asserted by appellee. We sustain the propositions complaining of this ruling.
At the conclusion of the testimony appellant requested a peremptory instruction, and the overruling of this request is assigned as error. A consideration of the statement of facts filed herein convinces us that the request should have been granted. As above noted, the issue involved was the title to the machinery and tools. Appellee's claim was based upon a mortgage executed by Grider, and appellant's claim was based upon a prior mortgage executed by Buell. If all of the property did not belong to Grider, appellee did not establish its case. The statement of facts filed herein is very meager, and consists of an agreement that the facts therein recited were established by competent evidence, and that same might be used and would constitute a complete statement of facts. These facts disclose by agreement that some of the tools in controversy belonged to Allen Buell, Jr., and some to A. D. Grider. There is no evidence as to what portion thereof belonged to Grider and what portion belonged to Buell. In the face of these agreed facts the jury has found that all of them belonged to Grider, and a judgment has been rendered for appellee on that theory. Clearly, the finding is without any support in the record. The burden was upon appellee to establish his title to the property in controversy, and his evidence did not show what portion of the property belonged to his mortgagor and what portion belonged to the appellant's mortgagor. There was therefore no basis for the judgment. There is an agreed fact that Buell purchased some of the property from appellee and had never paid it therefor. That agreed fact would not authorize a judgment for the appellee. The only title claimed by appellee was under the Grider mortgage. Buell might have been indebted to appellee for the purchase price of the tools, and at the same time have executed a valid mortgage to appellant thereon. No issue was made or presented as to any right of appellee to repossess the tools sold to Buell under any contract it might have had with Buell in the sale thereof, and no issue was made or presented as to the knowledge, if any, appellant had as to any rights of appellee at the time Buell executed the mortgage to him.
We overrule appellant's contention that the judgment in the foreclosure suit upon his mortgage was res adjudicata of the issues in the instant suit. A judgment is binding only upon the parties thereto and their privies. Had appellant desired to adjudicate the validity of appellee's claim upon his mortgage in the original suit, he should have made it a party. No character of judgment was rendered against appellee in that suit, and it is a well settled rule, based upon substantial and fundamental principles of justice, that the property rights of a party cannot be adjudicated in a proceeding to which he is not a party. Had appellee's mortgage been executed after the rendition of that judgment, a different question would arise. The rule is well stated in 34 C.J. 1017, in this language:
"A judgment against a mortgagor of realty, rendered prior to the execution of the mortgage, binds the mortgagee as a privy and is
conclusive upon him; but a mortgagee is not bound by any proceedings against his mortgagor which were not begun until after the execution of the mortgage, unless he was made a party thereto. And a judgment against the mortgagee is not binding on the mortgagor, where the latter was not in any way joined in the action. Thus, a mortgagee is not bound by the decree in a suit to foreclose a prior mortgage or other encumbrance if he is not made a party to the suit.
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The appeal is from a judgment in favor of appellee against appellant for the title and possession of personal property, consisting of well-drilling machinery and tools. The nature of the present suit can probably be best understood by a recital of the facts of a former suit, pleaded herein by appellant as res adjudicata of the issues involved. On the 17th day of June, 1927, Allen Buell, Jr., executed to appellant a chattel mortgage upon the property in controversy. This mortgage was signed, "Grider Buell, by Allen Buell, Jr." Thereafter appellant instituted a suit against A. D. Grider and Allen Buell, Jr., on a note for which the mortgage was executed as security, and for a foreclosure of the mortgage lien.
Grider answered in that suit, admitting in part the indebtedness to appellant, but defending against a foreclosure of the mortgage on the ground that the property covered thereby was not the property of Grider Buell, but was the individual personal property of Grider alone, in which Buell had no interest.
Issues were joined in that suit as to the authority of Buell to execute the mortgage, and resulted in a judgment in favor of appellant herein, foreclosing the mortgage as to all of the property. No appeal was prosecuted from that judgment.
The record discloses that appellee, Putnam Supply Company, filed a petition in intervention in that cause, declaring upon a mortgage executed to it by Grider. The judgment recites, "and the Putnam Supply Company, intervenor in said cause, having been permitted to withdraw its application to intervene." At the foreclosure sale under the original
judgment appellant became the purchaser. Prior to the date of the foreclosure sale appellee had caused the property to be sold under a power contained in a mortgage executed to it by Grider, and became the purchaser at the sale. Appellee's mortgage was dated subsequent to appellant's mortgage, but prior to the judgment foreclosing appellant's mortgage and prior to the institution of the suit for that purpose. The instant suit was filed by appellee to establish its title to the property as against the title of appellant obtained under his foreclosure suit.
Only two issues were answered by the Jury upon the trial of the instant case, and upon these answers judgment was rendered for appellee. These issues and the answers thereto were as follows:
"1st. On the 17th day of June, 1927, the date of the defendant Livezey's mortgage, were Arch D. Grider and Allen Buell, Jr., partners, as that term has been defined herein for you? Answer `No.'
"2d. On the 17th day of June, 1927, the date of the defendant Livezey's mortgage, was all or any part of the property in question the property of Arch D. Grider? Answer `Arch D. Grider owned all.'"
Eleven propositions for reversal, based upon thirteen assignments of error, are presented in appellant's brief. We shall not discuss each of these propositions separately, but shall discuss the controlling questions of law presented.
A special exception was sustained to paragraphs 3 to 10, inclusive, of appellant's first amended original answer, and this ruling of the trial court is assigned as error. This answer, among other things, pleaded the mortgage executed by Allen Buell, Jr., to appellant; alleged that Grider Buell were partners, and, as partners, were indebted to appellant in the sum of $2,206, and to evidence such indebtedness the partnership of Grider Buell, acting through Buell, executed to appellant a promissory note and the chattel mortgage first above described in this opinion. The court erred in sustaining a demurrer to this pleading. Appellant's claim of title came through this mortgage. A fact issue involved in this suit was whether Buell had the authority to execute this mortgage. That fact issue could be determined only from the evidence. Clearly, to our minds, appellant's pleading declaring upon this mortgage was not demurrable. So to hold would have the effect of denying appellant the right to plead his title. The facts alleged, if true, established a better title in appellant than that asserted by appellee. We sustain the propositions complaining of this ruling.
At the conclusion of the testimony appellant requested a peremptory instruction, and the overruling of this request is assigned as error. A consideration of the statement of facts filed herein convinces us that the request should have been granted. As above noted, the issue involved was the title to the machinery and tools. Appellee's claim was based upon a mortgage executed by Grider, and appellant's claim was based upon a prior mortgage executed by Buell. If all of the property did not belong to Grider, appellee did not establish its case. The statement of facts filed herein is very meager, and consists of an agreement that the facts therein recited were established by competent evidence, and that same might be used and would constitute a complete statement of facts. These facts disclose by agreement that some of the tools in controversy belonged to Allen Buell, Jr., and some to A. D. Grider. There is no evidence as to what portion thereof belonged to Grider and what portion belonged to Buell. In the face of these agreed facts the jury has found that all of them belonged to Grider, and a judgment has been rendered for appellee on that theory. Clearly, the finding is without any support in the record. The burden was upon appellee to establish his title to the property in controversy, and his evidence did not show what portion of the property belonged to his mortgagor and what portion belonged to the appellant's mortgagor. There was therefore no basis for the judgment. There is an agreed fact that Buell purchased some of the property from appellee and had never paid it therefor. That agreed fact would not authorize a judgment for the appellee. The only title claimed by appellee was under the Grider mortgage. Buell might have been indebted to appellee for the purchase price of the tools, and at the same time have executed a valid mortgage to appellant thereon. No issue was made or presented as to any right of appellee to repossess the tools sold to Buell under any contract it might have had with Buell in the sale thereof, and no issue was made or presented as to the knowledge, if any, appellant had as to any rights of appellee at the time Buell executed the mortgage to him.
We overrule appellant's contention that the judgment in the foreclosure suit upon his mortgage was res adjudicata of the issues in the instant suit. A judgment is binding only upon the parties thereto and their privies. Had appellant desired to adjudicate the validity of appellee's claim upon his mortgage in the original suit, he should have made it a party. No character of judgment was rendered against appellee in that suit, and it is a well settled rule, based upon substantial and fundamental principles of justice, that the property rights of a party cannot be adjudicated in a proceeding to which he is not a party. Had appellee's mortgage been executed after the rendition of that judgment, a different question would arise. The rule is well stated in 34 C.J. 1017, in this language:
"A judgment against a mortgagor of realty, rendered prior to the execution of the mortgage, binds the mortgagee as a privy and is
conclusive upon him; but a mortgagee is not bound by any proceedings against his mortgagor which were not begun until after the execution of the mortgage, unless he was made a party thereto. And a judgment against the mortgagee is not binding on the mortgagor, where the latter was not in any way joined in the action. Thus, a mortgagee is not bound by the decree in a suit to foreclose a prior mortgage or other encumbrance if he is not made a party to the suit. Nor is he, unless made a party to the suit, concluded by a judgment or decree enforcing a lien against the property. Similar rules apply in the case of chattel mortgages."
We attach no legal significance to the fact that appellee made application to intervene in the original suit and withdrew such application. The action of the court in permitting same to be withdrawn was not excepted to, and no appeal was taken from the judgment. No character of relief was or could have been granted against appellee in that suit, and it is not bound by the judgment rendered thereon.
The ruling of the court in rejecting certain evidence offered by appellant is assigned as error, but the record fails to disclose any error in that regard. Bill of exceptions No. 1 discloses that appellant objected to certain direct interrogatories and the answers thereto in the deposition of A. D. Grider. This bill does not disclose what any of the interrogatories or the answers were, and the deposition is not contained in the statement of facts. We are not advised in any manner as to the nature of the evidence to which appellant objected, and clearly would not be warranted in holding that the court erred in admitting the same.
For the reasons assigned the judgment of the trial court is reversed, and the cause remanded.
On Rehearing.
Both parties have filed motions for rehearing. Appellant is very earnest in his insistence that we erred in not sustaining his plea of res adjudicata. It is urged that appellee was a junior mortgagee, and that the rules applicable to senior and junior mortgagees should apply. We cannot adopt this view. It has been determined by the jury that the appellant had no valid mortgage, and we know of no rule which would prevent appellee from establishing that fact.
Appellant also insists that appellee should have made a direct attack upon the judgment in cause No. 1187. Neither can we adopt this view. Appellee was not a party to that suit, and no relief was sought or obtained against it therein. It therefore had no right to file a bill of review directly attacking the judgment. We have carefully considered appellant's motion, and same is overruled.
In our original opinion we reversed the judgment of the trial court on two grounds, the first being that the court erred in sustaining a special exception to certain portions of appellant's answer. A reconsideration of the record has convinced us that it affirmatively appears therefrom that this error of the court was harmless. The portion of the answer against which the exception was sustained was devoted to a pleading of the facts upon which a plea of res adjudicata was based. These facts, in our opinion, were insufficient to set up res adjudicata against appellee. We determined this in our general opinion. However, in one of the paragraphs included in the number which were stricken on exception appellant pleaded his mortgage, the foreclosure thereof, and the purchase by him of the property at the foreclosure sale. We held that, as to this paragraph, the exception was improperly sustained. It appears that the court, in sustaining this exception, determined only that the facts pleaded did not present the defense of res adjudicata. All of the instruments pleaded by appellant as constituting his chain of title were, in fact, introduced in evidence without objection, and the sustaining of the special exception did not have the effect of depriving him of his right to prove his title. We are not left to speculation or conjecture regarding this, but the statement of facts discloses that all of plaintiff's exhibits were introduced in evidence upon the trial. These exhibits included all instruments upon which appellant's claim of title was based.
We held in the recent case of Hemler v. Hucony Gas Co., 18 S.W.2d 942, that the error of the court in striking a portion of a pleading was harmless, where the case was tried on the issues embraced in the pleadings, and the parties against whose pleading the exception was sustained had the benefit of all the evidence. We cited many cases on this point in that opinion, and it is not necessary here to cite them again. The case should not have been reversed on account of the action of the trial court in sustaining the special exception.
The other ground of reversal in our original opinion was the error of the trial court in refusing appellant's request for a peremptory instruction. As stated in our original opinion, appellee was the plaintiff below, and had the burden of establishing title to the property in controversy. The abridged statement of facts which is brought here discloses that some of the property was purchased by Buell and some by Grider. Appellant claimed under Buell, and appellee under Grider. Since we were of opinion that appellee (plaintiff) failed to establish title to any severable portion of the property which could be identified, it had failed to discharge the burden resting upon it. In this conclusion we were in error. The property consisted of a well-drilling machine and certain tools, the principal item thereof consisting of the machine. The admitted facts disclose that Grider was the owner of the machine, but leave
uncertain the question of the ownership of the tools. In this state of the evidence a peremptory instruction would have been erroneous, for, under the evidence, appellee had at least discharged the burden resting upon it so far as the machine was concerned, which was the principal item involved. The deficiency of the agreed statement of facts with reference to the title to the tools is probably due to the fact that appellant had no title thereto. His mortgage covered only the machine and machinery, and no particular issue seems to have been made as to the title to the tools. The sufficiency of the evidence to support the verdict is not challenged. We erred in holding that the peremptory instruction should have been given.
Another question involving fundamental error has arisen in the minds of the court. The undisputed facts are that Grider mortgaged the property to appellee; that the mortgage conferred the power to sell the property in case of default in the payment of the debt secured thereby; that this power was exercised by appellee, and it became the purchaser under the sale. None of these undisputed issues were submitted by the court to the jury, and there is no jury verdict supporting appellee's title.
In the case of Cisco Bldg. Loan Ass'n v. Mason, 12 S.W.2d 1106, 1107, this court held that a record in this condition presents fundamental error. In determining that question we made the following holding:
"If appellee established by undisputed evidence the existence and terms of the contract alleged, it was necessary nevertheless to have the jury's verdict finding the existence and terms of such contract as a basis for the judgment. If the evidence was undisputed, and not of a character making it necessary or proper for the jury to determine the weight to be given same or the credibility of witnesses, it was the duty of the court to instruct a verdict. This duty does not warrant the court in substituting its own findings."
It is now the opinion of the majority that this holding was erroneous. Numerous cases hold that only disputed issues of fact should be submitted to the jury. The exact question which we decided in the Mason Case was presented in the case of American Surety Co. v. Hill County (Tex.Civ.App.)254 S.W. 241, 247. In that case it was contended that the judgment in a case tried by a jury must find support in the verdict, and that, if the evidence is undisputed, a peremptory instruction must be given. In disposing of that contention, the Dallas court uses this language:
"We therefore hold that where the trial court is proceeding under the law governing the submission to the jury of a case on special issues, as distinguished from the law governing a submission on a general charge, a judgment can be entered by the court without going through the form of having a verdict returned on peremptory instructions. Vernon's Sayles' Texas Civil Statutes, arts. 1970, 1984a, 1985; Fant v. Sullivan (Tex.Civ.App.) 152 S.W. 515; H. B. T. Co. v. Lynch (Tex.Com.App.) 221 S.W. 959; White v. Bell (Tex.Civ.App.) 242 S.W. 1082."
A writ of error was granted in that case, and same was referred to Section A of the Commission of Appeals, where the question was again considered. 267 S.W. 265, 268. In the course of the opinion by the Commission, this question is propounded:
"When the trial court renders, under the facts, the only judgment that could be rendered, is it error for the trial court to render such judgment when the case is tried by a jury, without a verdict from the jury upon which to base such judgment?"
After reviewing the authorities, the question is answered in the negative.
The same question was presented, and a like determination made, in the case of Jones v. Hughes (Tex.Civ.App.) 265 S.W. 740; Id. (Com. App.) 277 S.W. 624. This appears to have become the established rule. It was followed by the Dallas court in the very recent case of Vaughn v. Central State Bank (Tex.Civ.App.) 27 S.W.2d 1112.
We are therefore of opinion that no fundamental error appears in this record, and that the court had the authority to determine the undisputed issues of fact and render judgment thereon, without submitting same to the jury.
Appellant's motion for rehearing will be overruled.
Appellee's motion will be granted. The judgment heretofore rendered reversing and remanding this cause will be set aside, and in lieu thereof a judgment of affirmance will be entered.