Texas Sand Company v. Shield

381 S.W.2d 48, 7 Tex. Sup. Ct. J. 525, 1964 Tex. LEXIS 627
CourtTexas Supreme Court
DecidedJuly 8, 1964
DocketA-9628
StatusPublished
Cited by84 cases

This text of 381 S.W.2d 48 (Texas Sand Company v. Shield) 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
Texas Sand Company v. Shield, 381 S.W.2d 48, 7 Tex. Sup. Ct. J. 525, 1964 Tex. LEXIS 627 (Tex. 1964).

Opinion

*51 SMITH, Justice.

This suit was instituted on February 28, 1959, in the District Court of Coleman County by Respondents, Donald L. Shield, Leona Shield Montgomery, Charles L. South, James W. Dibrell, Josephine Dibrell Jobe, Elizabeth Dibrell, Joseph B. Dibrell, Jr., John F. Petty and James Robert Petty, hereafter referred to as plaintiffs, against Petitioners, Texas Sand Company, a corporation, Shield Oil and Gas Company, a corporation, Bridwell Oil Company, Elgean Shield and wife, Flora Shield, Richard Shield and wife, Sylvia Shield. Elgean C. Shield, F. Craig Morton, Otto Reynolds, H. & R. Drilling Company and John Hancock Mutual Life Insurance Company, hereafter referred to as defendants. Defendants Morton, Reynolds and H. & R. Drilling Company filed disclaimers.

Plaintiffs went to trial upon their First Amended Original Petition, wherein it was alleged that two conveyances made by defendants of a tract of land containing approximately 2,031 acres “were merely sham transactions with no intention to pass title to the Grantees therein, and the Grantors therein had no intention that such instruments should become effective as a conveyance of the properties described therein.” In the alternative, plaintiffs alleged that the first conveyance in question was made “with the intent to hinder, delay and defraud [plaintiffs] of and from the collection of their judgment debt.” Plaintiffs prayed that the conveyances in question “be adjudged fraudulent and void as against plaintiffs, and that same be set aside and held for naught, that plaintiffs’ judgment lien be foreclosed against the property conveyed and that such property be sold for the satisfaction of the judgment of plaintiffs.”

The defendants pleaded several affirmative defenses to the suit. However, we are concerned only with the pleaded defenses that the plaintiffs’ suit, filed on February 19, 1959, to set aside the deeds, dated March 1, 1954, and March 17, 1954, was barred by the Texas four-year statute of limitations, Article 5529, 1 Vernon’s Annotated Civil Statutes. The defendants further pleaded that they had peaceable and adverse possession of the 2,031-acre ranch for three years prior to February 19, 1959, the date of the filing of this suit. In regard to this latter plea, the defendants take the position that a deed, void because it is in fraud of creditors, is sufficient to support limitation title under the Texas three-year statute of limitations, Article 5507, 2 Vernon’s Annotated Civil Statutes.

The case was tried to the Court with the aid of a jury, but at the close of all of the evidence, the defendants filed a motion for instructed verdict, alleging as grounds therefor that (1) under the undisputed evidence, the suit was barred, as a matter of law, by the four-year statute of limitations, Article 5529, supra; and (2) as a matter of law, plaintiffs’ suit was barred by the Texas three-year statute of limitations, Article 5507, supra.

The trial court overruled defendant’s motion for instructed verdict and submitted special issues to the jury.

The jury, in answer to special issues, found: (a) that the first conveyance in question was executed with the intent to hinder, delay and defraud plaintiffs in the collection of their debts; (b) that the parties to the deeds did not intend that such deeds should be effective as conveyances of the properties therein described; (c) that at the time of the execution of the first deed in question, the title of record *52 in the name of the defendant, Elgean Shield, to the land in controversy was not held for the use and benefit of his wife, Flora Shield; (d) that the defendant, Texas Sand Company, together with its successors in title, had not held peaceable and adverse possession of the 2,031-acre tract of land for three years prior to the date this suit was instituted; (e) that both deeds in question were not based upon a substantial and valuable consideration.

Based upon the jury. verdict, the trial court rendered judgment for plaintiffs, set aside the two conveyances, held that plaintiffs had a valid judgment lien against the land in question (subject to the rights of certain parties), and foreclosed the plaintiffs’ judgment lien. The' Court of Civil, Appeals for the Eleventh Supreme Judicial District at Eastland, Texas, has affirmed. 367 S.'W.2d 88. We affirm the judgments of both courts.

The facts are these: On March 1, 1954, the defendants, Elgean • Shield, his wife, Flora Shield, and Shield Oil & Gas Company, conveyed .the land in question, among other properties, to- the defendant Richard Shield. By instrument dated March 17, 1954, the defendants, Richard -Shield and wife, conveyed the land in question and all other 'properties conveyed to them on March T; 1954, to the ' defendant, Texas Sand Company, a . corporation -organized By Elgean Shield. Both of these conveyances were recorded in Coleman County on April 5, 1954. ' It is these two conveyances which the plaintiffs are attacking in the present suit as being “sham transactions” which were allegedly given with the intent to defraud plaintiffs from the collection of their debt. In order to understand the Basis of the plaintiffs’ allegations, it is necessary to set out the details of an earlier suit between these parties.

Prior to 1952, the defendants, Elgean Shield and Shield Oil & Gas Company, were indebted to plaintiffs. This indebtedness was the subject matter of a lawsuit which was heard in the 83rd District Court of Jeff Davis County, Texas, and on July 26, 1954, plaintiffs recovered judgment against these two defendants in the amount, of $45,468.51. An abstract of this judgment was filed for record in Coleman County,. Texas, on September 7, 1954, and thereafter duly recorded. On' appeal to the Court of Civil Appeals, the judgment for'' the Eighth Supreme Judicial District at El Paso, Texas, affirmed this judgment in favor of plaintiffs. All rights of appeal to this court were fully exercised and the judgment became in all things final.

On June 18,-1956, execution was ordered on the judgment. On June 20, 1957, the execution was returned nulla bona■ by the sheriff of Coleman County, Texas. (In its - opinion in the present case, the Court of ■ Civil Appeals erroneously stated June '20, 1959.)

In the present case plaintiffs contend that the two conveyances in question were exer cuted on the part of defendants with the intent to hinder, .delay and defraud plaintiffs from the collection of this judgment.

We shall first-consider the defendants’! contention that' there is no evidence'' to' support the jury’s findings that the 'conveyl. anee of March 1, 1954, from! Elgean-Shield, and wife to Richard Shield, was made with the intent to hinder, delay and defraud the-plaintiffs in the collection of their-.debts. We overrule the defendants’ contention. ,

First, this conveyance was made-just prior to the trial of the case in Ft., Davis in which the plaintiffs were seeking a money judgment against the defendant Elgean Shield. This court has held that, the existence of pending suits against an indebted vendor at the time of a transfer alleged to be fraudulent is a sign of fraud. See Briscoe v. Bronaugh, 1 Tex. 326 (1846).

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Bluebook (online)
381 S.W.2d 48, 7 Tex. Sup. Ct. J. 525, 1964 Tex. LEXIS 627, Counsel Stack Legal Research, https://law.counselstack.com/opinion/texas-sand-company-v-shield-tex-1964.