Kerr v. Hutchins

• Decision Date: 01 January 1877
• Citation: 46 Tex. 384
• Parties: A. B. KERR v. W. J. HUTCHINS.
• Court: Texas Supreme Court

46 Tex. 384

A. B. KERR

v.W. J. HUTCHINS.

Supreme Court of Texas.

1877.

OPINION TEXT STARTS HERE1. FRAUDULENT CONVEYANCE--ESTATES OF DECEDENTS.

To maintain a suit against an executrix of an estate, (who by the terms of the will is not under the control of the Probate Court,) and against one to whom the petition alleges that a fraudulent mortgage of property had been made by the testator, for the purpose of setting aside the conveyance, the plaintiff, who claims to be a creditor of the estate, must show--

1. That he has a valid claim against the estate.

2. That as to his debt, the mortgage was fraudulent, and that as a fraudulent incumbrance, it constitutes a substantial impediment to the collection of his debt.

2. SAME.

The facts entitling such party to a recovery being established, the judgment should be against the executrix for the amount of the debt, and a decree against the claimant, under the fraudulent mortgage, cancelling it as to so much of the property mortgaged as might be necessary when levied on and sold, to satisfy the plaintiff's judgment.

3. APPROVED.

Hall v. McCormick, 7 Tex., 278, 279, approved.

4. JUDGMENT--FRAUDULENT CONVEYANCE.

A judgment rendered in a suit by a creditor against an executrix, and one claiming under the fraudulent conveyance, which sets aside such conveyance so far as the same may be necessary to secure the plaintiff's debt, does not affect the validity of the conveyance beyond its terms, so far as the executrix is concerned, nor as to other creditors who have not asked relief.

5. VERDICT.

The court should not receive a verdict which fails to find material issues submitted in the charge.

6. FRAUD.

In a suit to set aside a mortgage as fraudulent, the facts being established that the party charged with the fraud was largely indebted, at the time the mortgage was made, to various creditors, and mortgaged to one creditor “the mass” of his property, leaving not enough to satisfy the demands of other creditors, does not authorize the court to charge that such facts constituted fraud in law. It is the province of the jury, and not of the court, to draw the inference of fraud from such facts.

7. APPROVED.

Baldwin v. Peet, Sims & Co., 22 Tex., 708, and Briscoe v. Bronaugh, 1 Tex., 326, approved.

APPEAL from Colorado. Tried below before the Hon. L. Lindsay.

W. J. Hutchins, the appellee, filed his suit in the District Court of Colorado county against Sarah B. Mercer, executrix of her late husband, Levi Mercer, deceased, alleging that Mercer owed him a note of $3,092.82, with ten per cent. interest, bearing date in October, 1861; that he had made a will, and appointed his wife, the said Sarah B. Mercer, executrix, without security and independent of the Probate Court, according to the statute respecting independent wills, & c. The said executrix failed to give any bond as such executrix, and yet had proceeded to manage the business of the estate in said Probate Court, &c.; that the said executrix had allowed a certain note for about $6,500, secured by a vendor's lien upon certain real estate, and by mortgage upon certain other real estate, of said Mercer's estate, and that the probate judge had approved the same and granted the application of the executrix to sell the property for the satisfaction of the debt and interest so claimed to be due to said Kerr; that in fact the note had been fully paid off and discharged by Mercer before his death, and was now allowed and approved and ordered to be paid, by collusion and fraud. The petition prayed for and obtained a writ of certiorari, to bring up said cause to the District Court, &c.

William J. Hutchins afterwards filed another petition in the same court, against said Sarah B. Mercer, executrix, and A. B. Kerr, in which it was charged that the note, lien, and mortgage claimed by Kerr and allowed by the executrix had been paid and satisfied by Mercer before his death; and that if the same was then in the hands of A. B. Kerr, he only held the same for the use and benefit of Mercer, and had no interest in the same; that the note, lien, and mortgage were only attempted to be kept alive for the fraudulent purpose of defeating the other creditors of said estate, and to enable Kerr to protect the property of Mercer from his creditors, and prayed that the same be canceled and fully discharged as paid. To this petition, Kerr answered by general demurrer and general denial, March, 1867.

On the 24th of October, 1870, W. J. Hutchins filed his amended petition, setting forth the allegations in his original petition about the Kerr note and claim, and declaring that on the 15th day of December, 1863, the note of $6,500 was payable to one E. W. Glenn, and was on that day paid off by Mercer, but that Glenn, at the request of Mercer, assigned the same to Kerr; “and it was the understanding of Mercer and Kerr, at the time of said assignment, that the said Kerr was to hold said note, in order to secure him in the amount which he (Kerr) had paid to Glenn for Mercer on said note,” &c.; that “when the arrangement aforesaid was made, Levi Mercer was a man of wealth and owned a large number of negroes, but in 1865 (the date of the acknowledgment of the justice of the note by Mercer and the execution of the mortgage to Kerr on his lands to secure its payment) the negroes of Mercer had been freed, and he was largely indebted and unable to pay said debts, which facts were known to Kerr, and said acknowledgment was made, and said mortgage executed by the said Mercer, for the purpose of delaying, hindering, and defrauding his creditors, and for the purpose of protecting his property from his creditors,” &c. “Plaintiff relied on all the allegations in his original petition, and prayed that the court may determine from the facts how much of said note Kerr really owns, and only permit him to hold said amount against the estate of said Mercer, and for general relief,” &c.

On the 6th of October, 1870, Kerr filed his amended answer, in which he admitted the death of Mercer, his independent will, the allowance by the executrix of his claim upon the note, lien, and mortgage, but denied all combination, collusion, or fraud, and averred that he was the true, legal owner of the $6,500 note, with its purchase-money lien, and the mortgage for its...