Smith v. Carey
| Decision Date | 04 April 1908 |
| Citation | 110 S.W. 157 |
| Parties | SMITH v. CAREY. |
| Court | Texas Court of Appeals |
Appeal from District Court, Wise County; J. W. Patterson, Judge.
Action by Clara Carey against C. H. Smith and S. P. Smith. Judgment for plaintiff as to C. H. Smith, and against plaintiff as to S. P. Smith, and C. H. Smith appeals. Reversed and remanded.
W. H. Bullock and A. J. Clendenen, for appellant. T. J. McMurray and Hunter & Hunter, for appellee.
Clara T. Carey sued C. H. Smith and S. P. Smith to recover the amount of two promissory notes of $400 each, signed by defendants and payable to R. K. Halsell, alleging that the same had been transferred to her before maturity for a valuable consideration. The defense relied on was non est factum as to S. P. Smith, and that as to the other maker the consideration for which the notes sued on were executed was contrary to public policy and therefore illegal. The trial court before whom the case was tried made his findings of fact from which he entered judgment for the plaintiff as to C. H. Smith, and in favor of the defendant S. P. Smith on his plea of non est factum. Defendant C. H. Smith has appealed.
The sole question of law presented by the appeal is whether or not the agreement between R. K. Halsell and appellant, C. H. Smith, whereby the former agreed to lend to the latter a sum of money for which the notes in controversy were executed, the said Halsell intending at the time to place such money beyond the reach of his creditors and thereby to defraud them, and the said Smith, having full knowledge of such intention on the part of Halsell, agreeing with him to accept the money and to conceal the transaction from Halsell's creditors, is contrary to public policy and illegal. The question is discussed in Davis v. Sittig, 65 Tex. 497, in a case where suit was brought to recover on a note executed by one Davis to one Lewis in consideration of property conveyed by the latter to the former with intent to defraud his creditors, and that intent was known to all parties. The obligation was held to be unenforceable, notwithstanding our statute of fraudulent conveyances does not declare such transaction void except as to creditors, the court saying: "Such statutory declaration does not, however, strip such a transaction of its fraudulent character, or give to it standing as a valid contract which the courts will enforce." That case appears to be decisive of the present case, the only...
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