Arnold v. Peoples

• Decision Date: 18 March 1896
• Citation: 34 S.W. 755
• Parties: ARNOLD v. PEOPLES.
• Court: Texas Court of Appeals

34 S.W. 755

ARNOLD v. PEOPLES.

Court of Civil Appeals of Texas.

March 18, 1896.

Error from district court, Milam county; John N. Henderson, Judge.

Action by B. I. Arnold, administrator, against Tom Peoples. There was a judgment for defendant, and plaintiff brings error. Affirmed.

W. M. McGregor and Monta J. Moore, for plaintiff in error. W. T. Hefley and Henderson & Streetman, for defendant in error.

KEY, J.

The plaintiff, Arnold, administrator of the estate of Ed. Eaton, sued the defendant, Peoples, and charged in his petition that on the 21st day of September, 1886, said Eaton executed and delivered to Peoples, as accommodation paper, his promissory note for $1,800, due and payable September 27, 1887; that at the same time Eaton executed a trust deed, conveying a tract of land, to secure said note, making one E. C. Ross the trustee therein; that said Ross sold the land to satisfy said note, and Peoples became the purchaser thereof, and thereafter sold it for $3,000; that at the time Eaton executed said note he did not owe Peoples anything, and that thereafter Peoples executed to Eaton a note, dated January 1, 1887, due October 1, 1887, for $1,800, as an offset to the aforesaid note and mortgage executed by Eaton,—and the plaintiff asked for judgment on the latter note, and for $1,200, the excess for which Peoples had sold the land. Among other things, the defendant pleaded that the note sued on was given as a consideration for the aforesaid note and deed of trust executed by Eaton; that Eaton was insolvent, and executed said note and trust deed, and received the note sued on, for the purpose of defrauding his creditors. In replication, the plaintiff pleaded that the defendant was estopped, because, in a former suit between one of Eaton's creditors as plaintiff, and Eaton and Peoples as defendants, Peoples had alleged, in his answer, that said transactions were in good faith and without fraud. A verdict and judgment were rendered for Peoples, and Arnold has appealed.

The third assignment of error is the only one presented in appellant's brief that complains of the verdict, and it asserts that the evidence fails to show that, at the time Eaton executed the note and trust deed to Peoples, he was insolvent, "or financially involved in any material amount or sum." It was not absolutely necessary that Eaton should be insolvent to render the transaction fraudulent. A solvent debtor may transfer his property with intent to defraud creditors. Rev. St. 1895, arts. 2544, 2545; Legierse v. Whitehurst, 66 Tex. 245, 18 S. W. 510. Tom Peoples, defendant, testified that, on the 21st day of September, 1886, when Ed. Eaton gave the $1,800 note and deed of trust to E. C. Ross to secure same, Eaton & Stirman were partners, and their financial condition was bad. They were indebted about $3,500, and their creditors were pressing. They were in business at McGregor, Tex., and about that time were closed out to Friberg, Kline &...