Shearon v. Henderson

• Citation: 38 Tex. 245
• Parties: W. H. SHEARON v. TRAVIS HENDERSON, GUARDIAN, ETC.
• Decision Date: 01 January 1873
• Court: Supreme Court of Texas

38 Tex. 245

W. H. SHEARON

v.TRAVIS HENDERSON, GUARDIAN, ETC.

Supreme Court of Texas.

1873.

1. Suit may be maintained on an obligation payable in Confederate notes by an executor, administrator, guardian or other trustee, for the use of the beneficiary, but the defendant may reduce the amount to the value of the consideration of the obligation sued on upon alleging and proving such value.

2. Lis pendens is notice of the matters in litigation, but only such as appear in the pleadings.

3. It is error to instruct the jury that dealings between father and son are badges of fraud.

4. A precedent debt even barred by limitation may form a consideration for the conveyance of property, and if adequate in amount and the transaction be otherwise in good faith, the sale will be supported.

5. The fraudulent intent of the vendor in no way affects the title of the bona fide purchaser, and it is error to instruct the jury that the validity of a sale is dependent upon the intent of the vendor.

APPEAL from Lamar. Tried below before the Hon. A. H. Latimer.

On the seventeenth day of September, 1863, Samuel Hancock and Wm. H. Shearon executed their note, for property purchased at an administrator's sale, to W. B. Wright and L. Yates, administrators of the estate of John D. Thomas.

The note was not paid at its maturity, and on December 11, 1865, suit was brought against the makers of the note, Samuel Hancock and Shearon, by Richard J. Thomas, guardian of the minor heirs of the said John D. Thomas. In the subsequent proceedings the appellee, Travis C. Henderson, succeeded as guardian.

On April 9, 1867, affidavit and bond for attachment were filed, and on the eleventh of April, 1867, a levy of the attachment was made upon 359 acres of land. This land defendant Hancock had transferred to his sons, John M. and Martin H. Hancock, on the twenty-fifth of March, 1867. These vendees were made parties defendant.

The defendant, Samuel Hancock, pleaded general denial?? that the note was given for property bought of W. H. Shearon at administrator's sale, and that defendant was surety; that the note, by the express agreement of the parties thereto, was payable in Confederate bills; that the property for which the note was given was worth, in coin, but one-sixth the amount for which the note was given; that the defendants had tendered the Confederate States bills at maturity, etc.

Subsequent to the levy of the attachment plaintiff amended and alleged that the sale of the land levied on was fraudulent, without consideration, and for the purpose of defrauding creditors, etc.

John M. and Martin H. Hancock answered, that they had bought and paid for the said land, had received possession of it from their father, Samuel Hancock, prior to the levy of attachment, and that the purchase was in good faith, and that they had conveyed the land to one Louisa Hancock.

By amendment they set out the particulars of their purchase, and showed indebtedness to each from their father, liquidated by the transaction.

Shearon adopted the defenses of defendant, Samuel Hancock.

On the trial the court instructed the jury (touching the sale of the land) as follows:

“The suit of the plaintiff pending at the time of the sale made by Samuel Hancock to J. M. and Martin H. Hancock is constructive notice to them of the indebtedness of said Samuel Hancock to the plaintiff.

Dealings between father and son, when the party conveying is heavily involved in debt, is suspicious, and is regarded in the eye of the law as a badge of fraud or a presumption of fraud.”

The court refused to submit the question of “Confederate money” to the jury.

Verdict was rendered for the full amount of the note, and that the conveyance from Samuel Hancock to his sons, J. M. and Martin H. Hancock, was fraudulent.

Judgment was entered for the amount of the note and for sale of the property seized by attachment, and releasing defendant, Samuel Hancock, on his discharge in bankruptcy.

Motion for new trial was overruled, and the defendant appealed to this court.

The defendant, Samuel Hancock, went into bankruptcy on March 10, 1868. The plaintiff obtained orders from the United States court in bankruptcy to prosecute the suit to judgment.

Samuel Hancock was discharged under the bankrupt laws on November 1, 1869.

The other facts sufficiently appear in the opinion.

S. B. Maxey, for appellant, cited Smith v. Nelson, 34 Tex. 516; Miller v. Sherry, 2 Watts, 237; Carrington v. Brent, 1 McL. 167; Edmonds v. Chrenshaw, 1 McCord, 264; Leland v. Wilson, 24 Tex.; Wood v. Colvin, 5 Hill, 230;Catlin v. Jackson, 8 Johns. 546;Kent v. Roberts, 2 Story, 603.

W. B. Wright and Hancock & West, for appellees, cited Hamilton v. Pleasants, 31 Tex. 638;Trammell v. Philleo, 33 Tex. 395;Wright v. Linn, 16 Tex. 43;Briscoe v. Bronough, 1 Tex. 335;Gibson v. Hill, 23 Tex. 82;Green v. Banks, 24 Tex. 519;Edrington v. Rogers, 15 Tex. 188; Mosley v. Gilmer, 10 Tex. 397; Parks v. Atkinson & Chappell, 36 Tex. 16; Tutell v. Turner, 28 Tex. 777; Morgan v. Johnson, 15 Tex. 369; Hill v. Cunningham, 25 Tex. 32; 2 Story, Eq. §§ 105, 106; 2 Ves. 194; 2 Johns. Ch. 366.

OGDEN, J.

This is an action upon a promissory note given for the purchase of property at an administrator's sale in 1863. The first question presented in the record which requires notice is the defense that by an express agreement the note was to be paid in Confederate money, and therefore illegal and void. This defense has been held, in repeated decisions by this court, to be as a general rule a complete bar to an action. But an exception to this general rule has been recognized, when a party brings suit in a fiduciary capacity, and when the real parties interested cannot be chargeable with a participation in the illegality of the contract. This doctrine was clearly announced in Hamilton v. Pleasants, 31 Tex. 641, which has been closely followed in Trammell v. Philleo, 33 Tex. 395, and in Morgan v. Benson and several unpublished decisions.

Under the rule laid down and followed in those cases, an administrator or executor who sued as such, or other person suing in fiduciary capacity, could maintain a suit and recover judgment in legal currency on a note or other contract payable in Confederate money, for the full amount of such note or other contract. It is believed this court has uniformly held to this rule since the close of the late war, whenever the question was properly presented for decision, except in the case of Smith v. Nelson, 34 Tex. 520, when the general rule, and not the exception, was recognized as the law; but the court is now unanimous in the opinion that there is an error in that case, caused probably by an unintentional oversight of the character in which the plaintiff below brought that suit, and that the same should not be regarded as authority.

In view of the injustice which may result to parties who have purchased property at administrators' and executors' sales, and sales made by persons acting in a fiduciary capacity, with the distinct understanding and agreement that such contracts of purchase, etc., were to be discharged in Confederate money, and thereby were induced to agree to pay for such property a greater sum or price than it was worth in lawful money, this court, in the case of Thompson v. Bohannon, decided but a few days ago, so changed the rule heretofore adhered to, as to allow the defendant in such cases,...