Rutherford v. Carr

87 S.W. 815, 99 Tex. 101, 1905 Tex. LEXIS 166
CourtTexas Supreme Court
DecidedJune 1, 1905
DocketNo. 1438.
StatusPublished
Cited by60 cases

This text of 87 S.W. 815 (Rutherford v. Carr) is published on Counsel Stack Legal Research, covering Texas Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Rutherford v. Carr, 87 S.W. 815, 99 Tex. 101, 1905 Tex. LEXIS 166 (Tex. 1905).

Opinion

BROWN, Associate Justice.

J. M. Teliaferro is the common source of title. S. D. Goudlock recovered a judgment in the District Court of Titus County, against J. M. Teliaferro and W. D. Teliaferro, on November 2, 1893, for $1,477.30, upon which execution was issued within one year from the date of the judgment. The plaintiffs in error became entitled to the proceeds of the judgment and had the right to cause the same to be enforced by execution. On the 26th day of December, 1899, execution was issued upon the judgment, and the land in controversy was levied upon, regularly advertised and sold on the first Tuesday in February, 1900. The plaintiffs bid the land in and took a deed from the sheriff of that county, dated February 6, 1900. On March 25, 1893, J. M. Teliaferro conveyed the land in controversy to ,W. A. Poag, and the deed was duly recorded in a few days thereafter. C. C. Carr claims by mesne conveyance from Poag to himself.

The plaintiffs sued in the District Court of Titus County in trespass to try title to recover the land from the defendant, C. C. Carr, who pleaded his title specially claiming through the deed from J. M. Teliaferro to Poag. Plaintiffs, by supplemental petition, attacked the deed from Teliaferro to Poag alleging that it was made for the purpose of defrauding the creditors of the said Teliaferro, and specially to defraud the said Goudlock, plaintiff in the judgment before referred to, and set out all the facts necessary to charge the fraud upon Teliaferro and notice of it to Poag and to all those who purchased under him down to and including the defendant, C. C. Carr. The defendant excepted to the supplemental petition because it appears from the allegations of the petition that the deed from Teliaferro to Poag was made, delivered and recorded more than four years before the institution of this suit, so that the right to set the deed aside for fraud was barred by the Statute of Limitation of four years. The trial court sustained the *104 exceptions and the case went to trial before the judge without a jury. The plaintiffs offered to prove the facts of the fraud committed by Teliaferro, the fraudulent purpose of making the deed to Poag and notice to Poag and all the subsequent purchasers, which was objected to by the defendant, because there were no pleadings under which the testimony could be admitted, and the court sustained the objection. Judgment was rendered for the defendant.

The effect of a conveyance made for the purpose of defrauding creditors is prescribed by the following Article of the Revised Statutes: “Article 2544.—Every gift, conveyance, assignment, or transfer of, or charge upon any estate, real or personal, every suit commenced, or decree, judgment or execution suffered or obtained, and every bond or other writing given with intent to delay, hinder or defraud creditors, purchasers, or other persons of or from what they are or may be lawfully entitled to, shall, as to-such creditors, purchasers or other persons, their representatives or assigns, be void. This Article shall not affect the title of a purchaser for valuable consideration, unless it appear that he had notice of the fraudulent intent of his immediate grantor, or of the fraud rendering void the title of such grantor.”

The statute in plain terms denounces* all such conveyances that are made to hinder, delay and defraud creditors, as void, as to such creditors, yet such conveyances have been commonly held to be voidable. 14 Am. & Eng. Ency. Law (2d ed.), 28.

The meaning of such decisions is that the conveyances being valid as to all other persons, although void as to creditors who may at their option avail themselves of such invalidity, can not be characterized as void; for if absolutely void, they would confer no right as between the parties. But it has been uniformly held that as between the fraudulent vendee and the creditor the title remains with the debtor, and the transaction is to be treated as if the conveyance had never been made; it is void as to creditors. Scott v. Scott, 85 Ky., 392; Bump Fraud. Con., sec. 468; Belt v. Raguet, 27 Texas, 481. Hence, to say that such deeds are voidable adds nothing to their effect against creditors.

The judgment creditor has the election of two remedies against a fraudulent conveyance; that is, he may bring his action to' set aside the conveyance, or he may levy upon the land and sell it for the payment of his debt. Lynn v. Legierse, 48 Texas, 140; Bobb v. Woodward, 50 Mo., 102. In the event he takes the latter course, the purchaser at such execution sale gets the title, because at the time of the levy it remained in the fraudulent debtor, the defendant in the execution, and was subject to sale. Bump Fraud. Con., sec. 471; Scott v. Scott, 85 Ky., 392. In the case last cited the court said: “As against the fraudulent transferee, however, the creditor may seize the property as that of the fraudulent debtor; and the title that may be thus acquired is not a mere equity or right to control the legal title, and have the fraudulent sale vacated by an appropriate proceeding, but it is the legal title itself against which the fraudulent transfer is no transfer at all. The legal title remains in the debtor, as to his creditors, notwithstanding the fraudulent transfer, and the possession of the fraudulent transferee may properly be regarded as that of the debtor.”

*105 In this case the creditor recovered a judgment for his debt against Teliaferro and thereafter levied execution upon the land, sold it, and the plaintiffs in error purchased it at the sale. By that purchase they acquired the title and are entitled to recover the land unless the action is barred by the statute of limitations. Plaintiff’s suit was brought in an action of trespass to try title to which the defendant pleaded not guilty, and, at the same time, pleaded specially his title including the deed charged to be fraudulent; thereupon plaintiffs, by supplemental petition, replied to the defendant’s answer setting up facts that showed the deed to be fraudulent and claiming that title had never passed out of the debtor. The filing of the special plea of title made it necessary for the plaintiffs to file their supplemental petition that the testimony might be admitted to show the deed to be void. Paul v. Perez, 7 Texas, 338. If the defendant had not pleaded his title specially, the plaintiffs could have introduced the same evidence. McSween v. Yett, 60 Texas, 183. Therefore, the supplemental petition was a matter of pleading, giving notice of the attack to be made upon a muniment of defendant’s title and did not change the character of the suit. The purpose of the action was to recover the land, a cause of action which determines the character of the suit to be for the recovery of real estate. It is claimed that the plaintiffs’ action is barred by the time prescribed in the following article of the Revised Statute: “Article 3358.—Every action other than for the recovery of real estate, for which no limitation is otherwise prescribed, shall be brought within four years next after the right to bring the same shall have accrued, and not afterward.” The application of the statute, depends upon the character of the action, and this being an action for the recovery of real estate, it is excepted in express terms, the statute does not apply, and the plaintiffs’ right to recover the land was not barred.

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Bluebook (online)
87 S.W. 815, 99 Tex. 101, 1905 Tex. LEXIS 166, Counsel Stack Legal Research, https://law.counselstack.com/opinion/rutherford-v-carr-tex-1905.