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Interest Conveyed Under Texas Law
We find the reasoning of the two lines of cases to be
reconcilable. Leeson v. City of Houston, supra and its progeny
stand for the proposition that as against parties not privies to
the contract for deed, on execution of the contract for deed and
upon entry onto the property the purchaser acquires all the
benefits and burdens of ownership. Simply stated, as against
third parties the purchaser receives full equitable title when
the contract is signed and the purchaser enters into possession.
In contrast, Johnson v. Wood, 157 S.W.2d 146 (Tex. 1941) and
its progeny stand for the more limited proposition that as
against the vendor of the property the purchaser under a contract
for deed has an equitable right to specific performance. The
6(...continued)
The Texas courts have uniformly held that a
contract of sale such as is here involved does effect a
change of ownership. Under such a contract the
purchaser becomes full beneficial or equitable owner of
the property. All that remains in the seller is a bare
legal title, more in the nature of a security title to
guarantee payment of the purchase price than anything
else. The rule is summed up in 58 Tex. Jur. 2d 497,
499, � 267, under the heading “Vendor and Purchaser,”
as follows: “The purchaser, however, acquires an
equitable title or interest in the property from the
date of the contract, or in any event from the time
when he enters into possession, until his interest
ripens into a legal title by an absolute conveyance or,
where the transaction consists in a conveyance and a
reserved lien, by payment of the price or performance
of the contract. The passing of the equitable title is
a matter of law and not a matter of stipulation in a
contract.” [Bucher v. Employers Cas. Co., supra at
584.]
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