Futch v. Sanger

• Decision Date: 14 January 1914
• Citation: 163 S.W. 597
• Parties: FUTCH v. SANGER.
• Court: Texas Court of Appeals

163 S.W. 597

FUTCH v. SANGER.

Court of Civil Appeals of Texas. Austin.

January 14, 1914.

Rehearing Denied February 5, 1914.

Appeal from District Court, McLennan County; Tom L. McCullogh, Judge.

Action by J. J. Futch against Chas. L. Sanger. Judgment for defendant, and plaintiff appeals. Reversed and remanded.

Sleeper, Boynton & Kendall, of Waco, for appellant. J. D. Williamson, of Waco, for appellee.

RICE, J.

This suit was brought by appellant against appellee to cancel two certain deeds executed by him to appellee for two lots in the city of Waco, described by metes and bounds, and to remove cloud from title thereto, alleging that on the 19th of November, 1912, appellant executed and delivered to appellee his two certain deeds of conveyance to said two tracts of land, the consideration recited in each being the sum of $1,500 cash in hand paid; that at the time that said deeds were executed appellant and appellee each understood, knew, and agreed that said deeds and transfers were not in fact and in truth made as bona fide deeds and conveyances, but, on the contrary, were made for the following purposes and considerations, to wit: That appellee was then, and had been for a long time prior thereto, engaged in the business of what is commonly known as a "dealer in cotton futures," and that appellee had contracted with him as such cotton broker to sell and buy through his brokerage, and at sundry times and prices, sundry and numbers of bales of cotton, and that it was never in the contemplation of appellant and appellee that the actual delivery of said cotton should ever be made, but, on the contrary, was to be settled in dollars and cents according to the rise or fall of the market price of said cotton, and that, by reason of said buying and selling, and dealing in cotton futures, as hereinbefore alleged, appellee did, on or about said 19th of November, falsely and fraudulently represent to appellant that he (said Sanger) was then in great need of money, and that, if appellant would execute and deliver to him deeds to said property, he could and would use said deeds and title to said premises for security for himself in the furtherance of said business as hereinbefore alleged, and that, by reason of said representations so made by appellee, appellant did execute, sign, and deliver said deeds, but that the same was not at any time a settlement or closing up of the gambling contracts of plaintiff and defendant, or a settlement of any debt or claim due appellee by appellant. Appellant further represented to the court that the considerations recited in said deeds were false and fictitious, and were stipulated in same as a matter of form only, and in truth and in fact there was not paid the sum of $1,500, or any other amount, in either of said transfers, as recited in same, but that said deeds and conveyances were executed and delivered as a matter of accommodation from appellant to appellee. It was further alleged that said premises were reasonably worth at the time of said transfers the sum of $7,000. A general demurrer was sustained to this petition, and, appellant declining to amend, judgment was entered against him in accordance therewith, from which he has prosecuted this appeal.

The only question presented for our consideration is as to the correctness of the action of the court in sustaining said demurrer. If the transaction set out was void on the ground that it was in violation of law or public policy, then the ruling is correct; otherwise it is not.

It is not alleged that appellant had any interest in said business, or was to derive any profit or advantage therefrom, nor is it alleged that there was any agreement that the money or property was to be used for an illegal purpose, nor was it alleged that appellant made said deeds with the express intention on his part of having them used for an illegal purpose, nor was it alleged that he did anything in addition to the mere making and executing of such deeds, with the knowledge that the same could or would be used by appellee in conducting his business, and it is not alleged that said deeds were in fact used by appellee in procuring funds for conducting his business. The allegations, we think, merely show that, with a knowledge on the part of appellant that appellee was conducting an unlawful business, he executed the deeds, knowing that they would or could be used by appellee for the purpose of negotiating loans in order to carry on his business. It has been held in this state that the mere knowledge that money was to be used by the borrower for an illegal purpose when loaned will not, without further act in furtherance thereof, defeat the lender's right to recovery. See Cleveland v. Taylor, 49 Tex. Civ. App. 496, 108 S. W. 1037; Lewis v. Alexander, 51 Tex. 578; Oliphant v. Markham, 79 Tex. 547, 15 S. W. 569, 23 Am. St. Rep. 363. See, also, to the same effect, Jackson v. City Nat. Bank, 125 Ind. 347, 25 N. E. 430, 9 L. R. A. 657.

In Plank v. Jackson, 128 Ind. 424, 26 N. E. 568, 27 N. E. 1117, statutes which made void notes given for repaying money loaned at the time of a wager, for the purpose of being wagered, do not apply to a note given for money borrowed and used for the purpose of future gambling in wheat, where the lender had no interest in the gambling transactions, though he knew that the borrower intended to...