Stolte v. Karren

• Citation: 191 S.W. 600
• Decision Date: 29 November 1916
• Docket Number: (No. 5817.)
• Parties: STOLTE et al. v. KARREN et al.
• Court: Court of Appeals of Texas

191 S.W. 600

STOLTE et al. v. KARREN et al.

(No. 5817.)

Court of Civil Appeals of Texas. San Antonio.

November 29, 1916.

On Motion for Rehearing, January 31, 1917.

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Appeal from District Court, Bexar County; S. G. Tayloe, Judge.

Suit by Wilhemina Stolte and another against M. Karren and another. From a judgment in part for defendants and in part for plaintiffs, plaintiffs appeal. Judgment, so far as for defendants, reversed, with instruction, and cause remanded.

Carlos Bee, of San Antonio, for appellants. L. H. Porter and Lewright & Douglas, all of San Antonio, for appellees.

SWEARINGEN, J.

The appellant Wilhemina Stolte, joined pro forma by her husband, Christian Stolte, filed suit against appellees, M. Karren and John E. Trainer, constable, and prayed for a temporary injunction to restrain the sale under execution of certain property levied upon as the property of Christian Stolte, claimed by appellant as her separate property. Appellant also prayed to restrain the sale of other property claimed to be homestead and exempt. Appellees answered that the Smith tract was a donation to the appellant Wilhemina Stolte by Christian Stolte, her husband, and that appellee Karren was a creditor of the donor prior to the date of the execution of the gift deed, which was, therefore, void; and further that the deed was made with intent to defraud appellee Karren. Appellees further alleged that the indebtedness had been merged into a judgment subsequent to the date of the gift deed. The court heard evidence introduced by both parties and granted a temporary injunction restraining the sale of the homestead tract, and refused to enjoin the sale of the Smith tract. However, the court suspended his order refusing the injunction of the sale of the Smith tract pending an appeal to this court. The evidence shows the following facts:

Christian Stolte purchased the Smith tract March 12, 1915, the consideration being property conveyed in exchange. He executed a gift deed to his wife, Wilhemina Stolte, March 19, 1915.

Appellee M. Karren, on March 12, 1915, made claim from Christian Stolte of a debt due on that day as commission of 2½ per cent. for acting as broker and effecting an exchange of Christian Stolte's property, conveyed as consideration for the Smith tract. At that time Christian Stolte denied the indebtedness; told Karren he owed him nothing. On April 3, 1915, M. Karren sued Christian Stolte for the indebtedness, alleging in detail the nature of the indebtedness. Citation was duly and properly served upon Christian Stolte. Christian Stolte took the citation to his attorney as soon as it was served on him. No answer was filed. Judgment by default was rendered by the court, and in May, 1916, made final. In August, 1916, the judgment creditor, M. Karren, had the execution issued and delivered to the constable, who levied upon the Smith tract and homestead, and was proceeding to sell both tracts when this present suit was filed. Christian Stolte testified at the injunction hearing for appellant that he had never been indebted to Karren.

Appellants' first assignment complains that the court committed error in its judgment denying an injunction restraining the sale of the Smith tract claimed by appellant Wilhemina Stolte as her separate property, and, as a reason why it was error, recites that the evidence conclusively vested the legal title in Wilhemina Stolte on the 19th of March, 1915, and that defendants were attempting to sell the separate property of Wilhemina Stolte to satisfy a judgment for debt rendered in May, 1916, in favor of M. Karren, one of the appellees, against Christian Stolte; that appellant Wilhemina was not a party to the suit which resulted in the judgment for debt. Under this assignment it is contended by appellees that the remedy of injunction should be denied because appellant has an adequate remedy at law which precludes the equitable remedy.

This contention is in accord with the rules prevailing in Texas until the statute (article 4643) enlarged the remedy. This article of the statutes was construed in the case of Sumner v. Crawford, 91 Tex. 129, 41 S. W. 994, in accordance with the views herein expressed. Allen v. Carpenter, 182 S. W. 430.

It is further contended by appellees that the sale by virtue of the execution to satisfy the judgment against Christian Stolte in favor of M. Karren would not cast a cloud upon appellant's legal title. We are of the opinion that it would, for the reason that the prevailing title after the sale under the execution would be that one sustained by extraneous facts not apparent upon the record of either chain of title. Texas Mort. Co. v. Worsham, 5 Tex. Civ. App. 245, 23 S. W. 938. For instance, appellant Wilhemina Stolte's deed makes a prima facie case in her favor.

If, under article 3967, R. C. S., appellee proves that he was a creditor of the grantor in the deed prior to its execution, the prima facie case of the grantee would fail unless the grantees proved that the grantor had other property with which to satisfy the debt, either when the gift conveyance was executed or when the execution was levied.

Whether or not the grantor, Christian Stolte was (a) indebted to appellee (b) and the indebtedness existed prior to the execution of the gift deed, and (c) the grantor was insolvent at the time of the execution of the deed, and (d) was insolvent at the date of the levy of the execution, are four distinct facts necessary to be proven by evidence not of record. Maddox v. Summerlin, 47 S. W. 1022; Id., 92 Tex. 486, 49 S. W. 1033, 50 S. W. 567.

We are of the opinion that the sale under the execution might cast a cloud upon appellant's title, and that an injunction was an appropriate remedy. An examination of the transcript and statement of facts leads us to believe that the trial court did not refuse the injunction for the reasons as contended by appellee, viz. that a sale would not cast a cloud, and that injunction was not an appropriate remedy. On the other hand, we do not believe the undisputed evidence shows that appellant Wilhemina Stolte had an absolute legal title unaffected by the statute of frauds as contended by appellant. It seems probable to us that the trial court considered that the judgment and execution against Christian Stolte in favor of M. Karren conclusively established the four facts necessary for appellee's cause, viz.: (1) That Christian Stolte was indebted to M. Karren; (2) that the indebtedness existed prior to the execution of the gift deed; (3) that Christian Stolte, the grantor of the gift deed, was insolvent at the time of the execution of the gift deed; and (4) that the grantor was insolvent when the execution was levied — and further considered that the creditor's judgment was binding upon appellant Wilhemina Stolte, though she was not a party to that suit, thus in effect holding that the creditor's judgment could not be collaterally attacked even by a stranger, in suits like the one at bar. There is much apparent authority for such an opinion. The question, what effect will be given to an "in personam" judgment for debt used to establish the status of prior indebtedness as a basis for a suit to avoid a gift deed has been considered by the courts of England and America many times since the passage of the English statutes of 13 & 27 Elizabeth, from which our articles 3966 and 3967 were derived. And these many decisions by their conflicts present an interesting illustration of the confusion of clear legal principles made possible by the double meaning of words in our language and the absence or presence of various facts in each individual case. Some courts of unquestioned ability hold that the judgment cannot be admitted at all in the second suit. Inman v. Mead, 97 Mass. 310; Yeend v. Weeks, 104 Ala. 331, 16 South. 165, 53 Am. St. Rep. 50; Hartman v. Weiland, 36 Minn. 223, 30 N. W. 815. Others of equal eminence hold that the judgment can be introduced in the second suit for any purpose and is prima facie evidence. Finch v. Kent, 24 Mont. 268, 61 Pac. 657; Hinde's Lessee v. Longworth, 24 U. S. (11 Wheat.) 199, 6 L. Ed. 454. Many of the decisions hold that the judgment rendered subsequent to the gift conveyance establishes the indebtedness, and that the grantee of the gift conveyance cannot inquire into its correctness except for fraud or collusion; but does not establish that the indebtedness existed prior to the execution of the gift deed. Schmitt v. Dahl, 88 Minn. 506, 93 N. W. 665, 67 L. R. A. 590.

The correct rule we believe to be: That in suits by prior creditors to avoid a gift conveyance because made by an insolvent, the creditor's judgment, though rendered subsequent to the execution of the gift conveyance, and though the grantee in the gift conveyance was not a party to the creditor's suit which resulted in the judgment for debt against the grantor, is admissible in evidence for the purpose of establishing the indebtedness, and as to the grantor is final and conclusive and cannot be collaterally impeached; but, as against the grantee of the gift conveyance, is only prima facie evidence of the facts it purports to adjudicate. Parks v. Worthington, 101 Tex. 505, 109 S. W. 909; Hinde's Lessee v. Longworth, 24 U. S. (11 Wheat.) 199, 6 L. Ed. 454; Bump on Fraudulent Conveyances (4th Ed.) § 585; 2 Black on Judgments, § 605, note 490; McCamant v. Roberts, 66 Tex. 260, 1 S. W. 260. Against the grantor, the judgment is conclusive. Against the grantee, it is only prima facie evidence. "Prima facie evidence of a fact," says Mr. Story, "is such evidence as, in the judgment of the law, is sufficient to establish the fact, and, if not rebutted, remains sufficient for that purpose." 6 Words and Phrases, 5549.

To admit a judgment in personam as prima facie evidence in a suit with a stranger to that judgment is an exception to the established rule of law, which is that, as to parties and privies, the...