
    MONTGOMERY v. HEATH et al.
    (No. 2637.)
    (Court of Civil Appeals of Texas. Amarillo.
    March 17, 1926.
    Rehearing Denied April 21, 1926.)
    1. Adverse possession <&wkey;7l (3) — Possession and use of part of block lying north of river for required time under 5-year statute of limitation held to- have vested title in whole block, where (Teed conveyed whole block, though deed under which grantor held conveyed only part south of river (statutes of limitation of 3, 5, and 10 years [Rev. St. 1925, arts. 5507, 5509-, 5510]).
    Possession and use of part of block of land lying north of a river for the required' length of time under the five-year statute of limitations vested title in the whole block, where deed conveyed the - whole block, though deed under which grantor held conveyed only the portion lying south of the river.
    2. Acknowledgment &wkey;>20(3) — Vendor and purchaser &wkey;s23l (15) — Acknowledgment of deed taken by one who is officer in both! grantor and grantee corporations, is void, and registration of deed is not notice thereof (Vernon’s Sayles’ Ann. Civ. St. 1914, art. 3700; Rev. St. 1925, art. 3726).
    Acknowledgment of deed taken by one who is an officer in both grantee corporation and grantor corporation is void, and registration of the deed is not notice thereof under the registration laws, in view of Vernon’s Sayles’ Ann. Civ. St. 1914, art. .3700; Rev. St. 1925, art. 3726.
    
      3. Acknowledgment <&wkey;5.
    Unacknowledged deed is valid as a conveyance between the parties to it.
    4. Mortgages <&wkey;304 — Where one having a deed, in fact a mortgage, from corporation which became defunct, conveyed to sole shareholders, effect was to release lien so that title was in corporation.
    Where one having a deed which was in fact a mortgage from a corporation, which later became defunct, conveyed to the sole shareholders of the corporation, the effect was to release the lien so that legal and equitable title was in the corporation.
    5. Corporations <&wkey;>6l7(2).
    Shareholders of defunct corporation become the owners as tenants in common of its property subject to the claims of creditors.
    6. Tenancy in common <&wkey;>55(l).
    One or more tenants in common may sue in trespass to try title.
    7. Corporations <&wkey;6l7(2) — Shareholders of defunct corporation, being owners as tenants in common of its property, may recover its land in their own names for benefit of themselves and cotenants.
    Shareholders of corporation, being owners as tenants in common of its property, may recover its land in their own names but for the benefit of themselves and their eotenants.
    8. Appeal and error <&wkey;909'(6)— Court will presume corporation became defunct, after decree in another suit was rendered, where record does not disclose otherwise, and where necessary to hold present judgment valid.
    Court will presume that a corporation became defunct after decree in another suit was rendered, where the record does not disclose otherwise, and where it is necessary in order to hold the present judgment valid.
    9. Corporations <&wkey;> I — Corporations are entities separate from shareholders, and corporation’s title is not affected by a judgment against a shareholder.
    Corporations are entities separate from the shareholders, and the title of a corporation is not affected by a judgment against a shareholder.
    10. Judgment <&wkey;707.
    Titles of mortgagor and mortgagee of land are not affected by a suit to which they were not parties.
    Appeal from District Court, Wichita County; P. A. Martin, Judge.
    Trespass to try title by W. C. Heath and another against Mrs. R. E. Montgomery and others. Judgment for plaintiffs, and defendant named appeals.
    Affirmed.
    J. L. Lackey, of Wichita Halls, for appellant.
    Carrigan, Britain, Morgan & King, of Wichita Falls, for appellees.
   HALL, C. J.

W. C. Heath and R. E. Huff filed this suit in the district court of Wichita county in trespass to try title against A. H. Brown and other defendants, to recover a certain tract of land in Wichita Falls, known as block G of the water power lands. The appellant, Mrs. Montgomery, intervened and offered to defend the title of Brown, whom she claimed was her tenant. By an amended petition, the plaintiffs abandoned their action against all parties except Mrs. Montgomery and Brown. In addition to a formal petition in trespass to try title, they specially pleaded the statutes of limitation of three, five and, ten years (Rev. St. 1925, arts. 5507, 5509, 5510). The suit was tried before the court without a jury, resulting in a judgment for plaintiffs. Mrs. Montgomery alone has appealed.

The court filed no findings of fact. No question is made here as to the sufficiency of the pleadings.

The record shows that the block of said property in question is a part of a survey of land originally patented to John A. Scott. Scott died before the land was disposed of, and was survived by his wife and four children. One of the children, John A. Scott, Jr., conveyed his interest in the estate to Sarah E. Scott, who afterwards married H. P. Lee. The other heirs of John A. Scott, deceased, executed á power of attorney to John A. Scott, Jr., to act for them in the sale of all lands in Wichita county, Tex., and to execute necessary conveyances to the purchasers thereof. As such attorney in fact, John A. Scott, Jr., executed a plat of the town of Wichita Falls and a dedication deed. Between- the platted portions a strip of land comprising about 40 acres on both banks of the Big Wichita river was not platted, and is called the “water power property,” and is referred to as such in deeds subsequently made. The heirs of Scott then conveyed to M. W. Seely an undivided one-fourth interest in the water power property and certain other lands not involved in this suit. Thereafter, Seely conveyed a one-eighth interest to H. Judd and N. W. Bliss. Thereafter, Bliss, acting under a power of attorney from Judd and wife, conveyed this one-eighth interest to John A. Foreman, specifically describing the water power as:

“40 acres of land, more or less out of section 15, patented to John A. Scott, described as follows: All the land lying on both sides of Big Wichita river in said survey, and between the blocks of the town of Wichita Falls on the north side of the river and the blocks on the south side, including the privileges of the water power.”

Soon thereafter Seely conveyed his other one-eighth interest in the water power property to F. P. Knott, who, in turn, conveyed the said interest to Wichita Water Power Company. Through a trust deed executed by the Wichita Water Power Company upon said interest, and a sale by the trustee under the power therein contained, and a trustee’s deed, this one-eighth interest was also vested in John A. Foreman. Numerous other deeds and documents were introduced in evidence which have no hearing upon the issues to be decided,' and will not be set out. The result of the transfers, above mentioned is that John A. Foreman, by an unbrokep chain of title, acquired an undivided one-fourth interest in the water power property.

The plaintiffs also introduced a series of deeds showing that the remaining three-fourths undivided interest in the water power property had become vested in G. T. Howard, Z. H. Postles, H. M. Truehart, J. P. Smith, and F. P. Knott. It was shown in behalf of Mrs. Montgomery that after the city of Wichita Falls was laid off and platted, the parties who owned' the land upon which the town site was platted, executed a bond for title to a certain interest in all the land in question to R. E. Montgomery, trustee, and.in pursuance of said bond they afterward executed a deed to R. E. Montgomery, trustee, who was at that time the husband of the appellant in this suit

On May 5, 1888, a judgment was entered in the district court of Wichita county partitioning the lands comprising the town site between the various claimants, and the water power tract was recognized in said decree; R. E. Montgomery, however, was not a party to that suit. John A. Foreman had recovered a judgment against H. M. Truehart, J. P. Smith, G. T. Howard, and Z. H. Postles, and, under an execution sale based upon said judgment, had purchased the interests of both Knott and Smith in the water power property. The decree in the partition suit set aside to Foreman an undivided ^/ai of the water power, to Truehart an undivided 1!ífet, and to Howard and Postles an undivided 2%<t interest. This was cause No. 199 upon the docket of the district court of Wichita county. The commissioners appointed to make partition- divided practically all of the water power property except block G, as shown upon the plat made by the commissioners and filed in that suit, and which is a part of the statement of facts here. They found that block G was not susceptible to partition, and recommended that block G and certain other blocks in the immediate vicinity thereof be sold as prescribed by law, and that the proceeds be apportioned among the parties to the suit, except Smith. Judgment was entered accordingly, and block G was sold by the sheriff of Wichita county under the judgment and was purchased by Foreman.

On March 2, 1892, Foreman conveyed the whole of block G to Falls City Milling Company, a corporation, describing it as follows:

“Block G of the 40 acres of land out of sections 15 and 17, John A. Scott, attached to the water power of Wichita river as platted and land out by the commissioners for partition in the case of John A. Foreman v. H. M. Truehart, G. T. Howard, Z. H. Postles, and J. P. Smith, No. 199, on the docket of the district court of Wichita county, Tex., and fully set out in decree of said court on record in court minute book 1, pp. 618 "to 621, inclusive, to which reference is hereby made for description, and being' that- unilateral block of ground inclosed between Wichita street and the Big Wichita river, and between the F. W. & D. G. R. R. right of way and the unnamed street that leads from Wichita street to the wagon bridge of the said Big Wichita river.”

A reference to the commissioners’ plat shows that block G includes land on both sides of the river.

On May 11, 1894, block G was levied upon as the property of Falls City Milling Company, and sold at sheriff’s sale, and by the sheriff conveyed to Victor Milling Company, a corporation1. This sheriff’s deed describes the property as follows:

“All of block G of what is known as the water power property, a plat of which is recorded in the county of Wichita, volume 1, p. 619, district court minutes of Wichita county, Tex.”

This deed was filed for record May 23,1894. On August 20, 1904, Victor Milling Company, as a corporation, conveyed all of block G to the First National Bank of Wichita Falls, Tex., by W. C. Heath, vice president and general manager of the milling company. To the left of his signature appears the following: “Witnesses at the request of grantor: Harley Heath, Alena A. Heath.” The acknowledgment of Harley Heath as a witness was taken by R. E. Huff on August 25, 1904. It was shown that the deed so executed was in fact a mortgage given to secure the grantee bank for- certain indebtedness due it from the Victor Milling Cbmpany. The title remained in that condition until August 25, 1921, when the bank conveyed all that part of block G lying south of the Wichita river to R. E. Huff and W. C. Heath, which deed was filed for record August 20, 1921. The consideration recited therein is as follows:

“For and in consideration of the sum of one and no/100 dollars in hand paid by R. E. Huff and W. 0. Heath and other valuable considerations, to wit: The payment of all sums of money due by Victor Milling Company to the bank, which payment was made several years ago, but reconveyance of the property overlooked at the time.”

The deed-also contains this recital:

“This conveyance is made to said R. E. Huff and W. C. Heath because they aré the owners of the capital stock of said Victor Milling Company, which is now out of business.”

It is contended by the appellees that by reason of the facts above stated, they have shown their ownership of block G by an unbroken chain of title from'the sovereignty of the soil. They further contend that between the purchase of the property by the Victor Milling Company under the execution sale against Palls City Milling Company, made by tbe sheriff on May 11, 1894, and tbe recon-.veyanee to them by tbe First National Bank of tbe property on August 20, 1904, they have also acquired title under tbe statutes of limitation of five and ten years.

Tbe appellee Heath testified that after tbe Victor Milling Company bought tbe property in May 1894, they commenced- to make improvements on block G immediately; that tbe company’s mill building was located on block 76, across tbe street from, and north of, block G, but that in connection with tbe mill tbe company by proper improvements used all of that part of block G lying north of tbe river as a wagon yard, and that they put in a pumphouse on tbe bank of tbe river, and that tbe wagon yard was in operation continuously from tbe middle of June, 1894, and was in their possession until tbe 20th of August, 1904, when tbe property was conveyed to tbe bank. He further testified that they claimed this property under tbe sheriff’s deed in 1894, and paid tbe taxes every year until they disposed of it; that their use of it as a wagon yard and for tbe operation of their pumphouse was open and notorious; that they never bad any trouble nor heard of any adverse claim by any one until three or four years before this suit was filed.

It is unnecessary to discuss tbe question of title under tbe ten-year statute, but we think tbe evidence clearly establishes title to tbe whole of block G in tbe Victor Milling Company under tbe five-year statute prior to tbe time of the conveyance to tbe bank.

If it be admitted that the description of block G set out in Foreman’s deed to the Falls City Milling Company is not sufficient to include that part of the block in litigation lying south of tbe river, nevertheless tbe whole block is described in and conveyed by tbe sheriff’s deed which conveyed tbe entire block from that company to tbe Victor Milling Company, and- tbe possession and use by tbe last-named company of tbe north half of tbe block for tbe required time is sufficient to vest title in it to tbe whole block under tbe five-year statute; so we deem it unnecessary to discuss tbe effect of tbe Foreman deed to the Falls City Milling Company.

Tbe plaintiffs’ chain of title is next attacked upon the ground that tbe deed from tbe Victor Milling Company to tbe bank, which was shown to be only a mortgage, was proven by. one of -the subscribing witnesses before tbe plaintiff R. E. 1-Iuff as a notary at a time when he was tbe president both of the-grantor Victor Milling Company and tbe grantee bank. Being an officer in these two corporations, it seems, has tbe effect of rendering the acknowledgment void (W. C. Belcher L. M. Co. v. Taylor [Tex. Com. App.] 212 S. W. 647), and the registration of such an instrument is not notice under tbe registration laws, but there is no question of notice connected with tbe instrument, and even if it bad not been acknowledged at all, it is valid as a conveyance between tbe parties to it. McLane v. Canales (Tex. Civ. App.) 25 S. W. 29. Having been recorded for more than ten years before tbe filing of this suit, it was, under tbe record before us, -admissible in evidence by express provision of tbe validating act of 1907. V. S. C. S. 3700; R. S. 3726. -No objection was. made by tbe appellant to its introduction in evidence. Since it was shown to have been only a mortgage, though in form a deed; tbe reconveyance of tbe block by tbe bank to tbe plaintiffs was, in legal effect, a release of the lien, and the result is that tbe legal and equitable title' was in tbe Victor Milling Company, a corporation. But aside from these two conveyances, we think plaintiffs could maintain this action. It was shown by uncontroverted evidence that after tbe Victor Milling Company’s plant burned in December, 1903, tbe corporation ceased to function as a milling company, though it continued to operate tbe wagon yard for an indefinite period. Appellant states that at all times tbe plaintiffs owned all or practically all of tbe capital stock of tbe milling company; then, as tbe shareholders of tbe defunct corporation, they became tbe owners as tenants in common of its property, subject, of course, to tbe claims of any creditors; and it does not appear that the company bad any creditors. So, under -the rule that one or more tenants in common may sue in trespass to try title, they were such owners as were entitled to recover tbe land in their own names, but of course, for tbe benefit of themselves and their cotenants, if any.

It follows, therefore, that there was no outstanding superior title shown either in the bank or tbe defunct milling company. The record does not disclose when tbe Victor Milling Company ceased to function, and in support of tbe court’s judgment, we must presume that it was not until after tbe decree was entered in tbe partition case of Truebart v. Montgomery, on February 25, 1913. Tbe record shows that Truebart as a part owner in tbe town site sued R. E. Montgomery and numerous other owners of tbe town site, including tbe plaintiff R. E.' Huff, for partition. It further shows that Huff .was one of the attorneys who represented tbe defendants in that suit, but that in bis capacity as a defendant none of tbe common property was partitioned to him. He was decreed'to be tbe owner of certain lots which he claimed adversely to Truehart and bis codefendants, and as to him and bis property rights the suit was one in trespass to try title. Neither the bank nor tbe Victor Milling Company were made parties defendant in that suit, although the deed from the company to the bank was then on record. While Huff was a stockholder in both corporations, they were as to him separate entities, and their title to block (5 was in no degree impaired by that judgment. Since neither the bank nor the milling company were parties to that suit, their title to block G was in no way affected by the judgment which attempted to vest the title to the land in question here in' Montgomery. Holloway v. Mellhenny, 14 S. W. 240, 77 Tex. 657; Oliver v. Robertson, 41 Tex. 422; Ship Channel Co. v. Bruly, 45 Tex. 6.

The judgment is affirmed. 
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