Stonecipher's Estate v. Butts' Estate
| Citation | 591 S.W.2d 806 |
| Decision Date | 19 December 1979 |
| Docket Number | No. B-8379,B-8379 |
| Parties | ESTATE of L. W. STONECIPHER, Deceased, Petitioner, v. ESTATE of Thomas BUTTS, Deceased, et al., Respondents. |
| Court | Texas Supreme Court |
Adams & Browne, Gilbert T. Adams and Richard J. Clarkson, Beaumont, for petitioner.
Louis Dugas, Jr., Orange, for respondents.
L. W. Stonecipher, now deceased, sued the Estate of Thomas Butts, deceased, Irene Butts Babington (Thomas' former wife) and Elmer Newman for damages arising from an alleged conspiracy to prevent the collection of a judgment lien, for fraudulent concealment of a cause of action, and to collect a judgment. The trial court rendered judgment non obstante veredicto that Stonecipher take nothing. This judgment was affirmed by the Court of Civil Appeals. 579 S.W.2d 27 (Tex.Civ.App.). We reverse the judgments of the courts below.
In 1950 Stonecipher obtained a judgment against Thomas and Irene Butts for $21,080.36. Executions were issued on May 1, 1951 and returned nulla bona by the Orange County sheriff. Only $5,000.00 was paid on the judgment and discovery proceedings were had which consisted of a bill of discovery, interrogatories and depositions. Thomas testified he conveyed 160 acres of Louisiana land to his banker, Elmer Newman, shortly before the trial for $6,000.00 cash. He used the cash to pay off loans to the bank and for living expenses. Neither he nor his wife, Irene, had assets subject to execution. Irene testified she did not have, either before or after the trial, assets subject to execution. Newman testified he paid Thomas for the 160 acres in $20.00 bills and that he knew of no other assets owned by Thomas or Irene. Stonecipher did not extend the judgment and it became dormant in 1961.
In 1970 Stonecipher discovered that Newman conveyed the 160 acres back to Thomas in 1967. He also discovered that Irene owned 80 acres of Louisiana land which she conveyed to Newman the day before her post-judgment deposition was taken. Newman deeded the 80 acres back to her on the same day he deeded the 160 acres back to Thomas. These deeds recited the consideration as being in settlement of the property rights on divorce of Thomas and Irene. Their divorce was granted on the same day the deeds were executed.
Stonecipher brought this action against Thomas, Irene and Newman in 1971. He alleged that a conspiracy of these defendants prevented him from collecting the judgment lien and that the fraudulent acts of the defendants tolled the running of the limitations of Article 3773. 1
The Court of Civil Appeals held Stonecipher did not have a cause of action against Newman for conspiracy to prevent the collection of a judgment lien. It reasoned that because the judgment was legally dead there was no recoverable damage suffered as a result of the conspiracy. That court relied on Lallathin v. Keaton, 198 Okl. 312, 178 P.2d 101, 103 (1947), which stated:
The gist of this action is not the conspiracy, but the damage suffered by the plaintiff as a result of the conspiracy. . . . Since the judgment had become legally dead prior to the time the present action was commenced, there was no recoverable damage suffered as a result of the alleged conspiracy.
There is no distinction, in legal effect, between a tort action in fraud and deceit . . . to prevent the collection of a judgment legally dead and a tort action in conspiracy, as here, to prevent the collection of such a judgment. (citations omitted)
The Court of Civil Appeals adopted the rationale and holding of the Lallathin court as its own. We disagree.
There are no Texas cases precisely in point. However, courts throughout the United States have long recognized a cause of action for damages for a post-judgment conspiracy to prevent the collection of a judgment lien. The Supreme Court of the United States, in Findlay v. McAllister, 113 U.S. 104, 5 S.Ct. 401, 28 L.Ed. 930 (1884), held that a judgment creditor has a cause of action against those who dispose of goods of the debtor, seized by the sheriff to satisfy a judgment or against one who prevents the seizure of the debtor's goods on execution.
In the Findlay case, a circuit court of Missouri by mandamus commanded a county court to levy and collect a special tax to pay Findlay's judgment against the county. The collection of the taxes was thwarted by McAllister and others by physically resisting the collection and threatening violence to those who attempted to collect the tax. Findlay brought suit alleging a conspiracy to prevent the collection of his judgment. The defendants contended that Findlay did not have such a property interest in the taxes as to entitle him to maintain an action for conspiracy. The Court stated that the collection of these taxes was for the specific purpose of paying Findlay's judgment and he therefore had a legal interest in the money to be raised by the special tax, which the law gave him, in the property and its sale, and he suffered a direct damage from the acts of the defendants by which a sale was prevented. This case further held that a general creditor has no interest in or lien upon the property of the debtor and therefore no wrong has been done him if the debtor, in conspiracy with others disposes of the debtor's assets.
The prevailing authority on civil liability for conspiracy to aid a debtor to evade payment of his debts is expressed in 2 A.L.R. 287-293. It is there stated:
Merely to conspire to commit a wrong is not actionable, and imposes no civil liability upon the members of the conspiracy. To enable the injured person to maintain an action for damages based upon a conspiracy, it must be shown that the defendants have been guilty of the commission of a wrongful act in violation of some right of the complainants, and that damage has resulted as a proximate consequence of the wrongful act complained of. Applying this general doctrine to the question under consideration, it is clear that a mere general creditor without a lien has no interest in the debtor's property, and hence is not legally injured by any conspiracy with the debtor to aid him in disposing of his property in order to evade the payment of his financial obligations, and cannot maintain an action based upon such conspiracy.
A creditor with a lien has a right of action against persons who interfere with the property of his debtor upon which he has a lien, so as to prevent the levy or sale by the sheriff to satisfy his judgment.
In Le Gierse et al. v. Whitehurst, 66 Tex. 244, 18 S.W. 510 (1886), it was held that a general creditor has no right in or lien upon property of the debtor and therefore suffers no damages if the debtor's property is conveyed to others to evade payment. The damage sustained by the creditor is in being deprived of an opportunity to make a levy and this damage...
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